Sued for Debt in Indiana? Here's What to Do Next

20 days from service.

6 years for credit cards and open accounts. 10 years for written contracts.

Yes. Federal limits apply.

Small claims for up to $10,000. Superior or circuit court for larger amounts.

Indiana's statute of limitations on a written contract is six years under Ind. Code § 34-11-2-9, and four years on an account or oral contract under Ind. Code § 34-11-2-7. Indiana courts have generally applied the six-year written-contract limit to credit-card debt when the cardholder agreement is in writing. The clock starts on the date of the last payment or the date the account was charged off. If you are sued more than six years after the last activity, statute of limitations is an affirmative defense that must be pled in your answer under Indiana Trial Rule 8(C) or it is waived. Filing a time-barred collection action can support a counterclaim under the federal FDCPA at 15 U.S.C. § 1692e(2) for misrepresenting the legal status of a debt and under Indiana's Deceptive Consumer Sales Act at Ind. Code § 24-5-0.5-3. Partial payment or written acknowledgment can restart the clock.

Indiana wage garnishment under Ind. Code § 24-4.5-5-105 follows the federal Consumer Credit Protection Act cap at 15 U.S.C. § 1673. A judgment creditor can take the lesser of 25 percent of weekly disposable earnings or the amount by which weekly disposable earnings exceed 30 times the federal minimum wage. Disposable earnings means gross pay minus required deductions. Voluntary deductions like 401(k) contributions are not subtracted. Child support, alimony, and federal student-loan garnishments follow different percentages under federal law. Social Security, SSI, VA benefits, unemployment, workers compensation, and most retirement income are exempt under federal law and Ind. Code § 34-55-10-2. You preserve exemptions by filing a claim with the court after receiving the wage-garnishment order.

Indiana small-claims hearings on collection matters up to $10,000 are governed by the Indiana Small Claims Rules. If you do not appear at the hearing date listed on the notice of claim, the court will enter a default judgment for the amount claimed plus court costs under Small Claims Rule 10(B). Once entered, the judgment is enforceable for 20 years under Ind. Code § 34-55-9-2 and can be used to garnish wages, levy bank accounts, and place liens on real estate. You may move to set aside a default under Small Claims Rule 10(C) by showing excusable neglect and a meritorious defense, but the motion must be filed within one year. The right approach is to appear at the initial hearing and assert affirmative defenses such as statute of limitations and lack of standing on the record.

Generally no. The federal FDCPA at 15 U.S.C. § 1692c prohibits third-party debt collectors from contacting third parties about your debt except to obtain location information, and even then only once per third party. Contacting your employer about the debt itself or telling family members about the amount you owe is illegal. The collector is also barred under 15 U.S.C. § 1692c(b) from contacting third parties after being told you are represented by counsel. Indiana's Deceptive Consumer Sales Act at Ind. Code § 24-5-0.5-3 may also apply to a collector who is also the original creditor and not just a third party. Document any unauthorized contact, including dates, times, names, and what was said, because each violation can mean up to $1,000 plus actual damages and attorney fees under 15 U.S.C. § 1692k.

If you are sued in Indiana superior court for an amount above $10,000, you have 20 days from service to file a written answer under Indiana Trial Rule 12(A) (23 days if served by mail). In your answer, deny the allegations you do not know to be true, demand strict proof of the chain of assignment from the original creditor, and assert affirmative defenses including statute of limitations under Ind. Code § 34-11-2-9, lack of standing of the assignee, improper venue under Trial Rule 75, and any Deceptive Consumer Sales Act or FDCPA counterclaim. Indiana courts use the e-filing system through CourtPortal, and self-represented litigants can find free forms through the Indiana Supreme Court website. Default judgment under Trial Rule 55 is entered automatically if you do not respond.