Indiana Debt Collection Laws: Your Rights Beyond the FDCPA

In Indiana, a company that collects consumer debts for others generally cannot legally operate unless it is licensed as a collection agency with the Indiana Secretary of State and has posted a surety bond, under the Indiana Collection Agency law at Indiana Code Title 25, Article 11. That is a meaningful protection the federal Fair Debt Collection Practices Act (FDCPA) does not provide: federal law regulates how collectors behave, but it does not require them to hold a state license or bond. The other Indiana-specific number worth memorizing is the statute of limitations: most written consumer debts in Indiana — including credit-card accounts — must be sued on within six years, after which a collector can no longer win a lawsuit to force payment.

Indiana's collection-agency licensing requirement

Indiana Code Title 25, Article 11 (the Collection Agency law) defines a "collection agency" broadly to include businesses that, for compensation, collect or attempt to collect debts owed to someone else. Those agencies must register with and be licensed through the Indiana Secretary of State. The statute also requires a collection agency to maintain a surety bond, which exists so that consumers and creditors have a source of recovery if the agency mishandles or misappropriates money it collects.

The exact bond amount and licensing fees are set by statute and can change, so confirm the current figure directly with the Indiana Secretary of State rather than relying on a number you read online. The practical point for you as a consumer is this: if a collector is contacting you about a debt, you can ask whether it is licensed in Indiana and check that license. An unlicensed collection agency operating in Indiana is acting outside the law, and that fact strengthens any complaint or defense you raise.

Be aware of the main limits on the licensing rule. The collection-agency statute is generally aimed at third-party collectors — businesses collecting debts that belong to other companies. An original creditor collecting its own debt in its own name (for example, a bank pursuing its own loan) is typically not a "collection agency" under this law, just as it is usually not a "debt collector" under the FDCPA. Certain regulated entities, attorneys handling collection through litigation, and some others may also fall outside the licensing definition. When in doubt, verify the collector's status before assuming it must be licensed.

The six-year statute of limitations on most debts

Indiana sets time limits on how long a creditor or collector has to sue you. For written contracts for the payment of money executed after August 31, 1982 — the category that covers most modern consumer agreements — the limit is six years. Actions on accounts and contracts not in writing are also subject to a six-year limit. Because credit-card debt is generally treated as an account, the practical takeaway is that six years is the key window for the great majority of consumer debts in Indiana.

The clock generally starts running from the date of your last activity on the account, such as your last payment or the date the account first went into default. Once the limitations period has expired, the debt is often called "time-barred." A time-barred debt does not disappear — a collector can still ask you to pay and can still report it within the limits of the federal Fair Credit Reporting Act (FCRA) — but the collector loses the ability to win a lawsuit forcing you to pay, as long as you raise the statute of limitations as a defense.

Two cautions matter here. First, the statute of limitations is an affirmative defense: if you are sued on an old debt and you do not show up and raise it, the court can still enter a judgment against you. Second, making a new payment or signing a new written promise to pay can, in some circumstances, restart or revive the clock. If a collector offers a "settlement" on a very old debt, get advice before paying, because a small payment could expose you to a fresh six-year window.

Protections that go beyond the FDCPA

The federal FDCPA is the baseline. It bars third-party collectors from harassing you, calling at unreasonable hours, lying about the amount or legal status of a debt, threatening actions they cannot take, and contacting you after you send a written request to stop. The FDCPA also gives you the right to request validation of a debt. Those protections apply in Indiana in full.

Indiana law adds more. Deceptive or unconscionable conduct in connection with a consumer transaction — which can include abusive collection tactics tied to a consumer debt — may violate the Indiana Deceptive Consumer Sales Act (Indiana Code 24-5-0.5), which the Attorney General enforces and which can give consumers their own remedies. Indiana's Uniform Consumer Credit Code (Indiana Code 24-4.5) also governs consumer credit transactions and restricts certain unfair collection and credit practices. Together, the licensing law, the Deceptive Consumer Sales Act, and the consumer-credit code give Indiana consumers overlapping avenues that exist alongside, not instead of, the FDCPA.

Wage garnishment limits in Indiana

If a collector sues you and wins a money judgment, it may try to garnish your wages. Indiana follows the federal ceiling rather than offering a more generous cap for most consumers: garnishment for an ordinary consumer judgment is limited to the lesser of 25% of your disposable earnings for that week, or the amount by which your disposable earnings exceed 30 times the federal minimum wage. This mirrors the federal Consumer Credit Protection Act 25% cap. Different rules apply to child support, taxes, and student loans, which can reach a larger share of your pay. Certain income — such as Social Security and many other federal benefits — is generally protected from garnishment for ordinary debts.

How to enforce your rights

Start by putting things in writing. If a collector contacts you, you can send a written request that it validate the debt, and you can tell it in writing to stop contacting you. Keep copies of every letter, and keep a log of calls with dates, times, and what was said. This documentation is the foundation of any complaint or lawsuit.

If a collector violates the FDCPA, you can sue in federal or state court, and successful consumers may recover damages plus attorney fees. For violations of Indiana's own laws, you can complain to the Attorney General and, depending on the statute, may have a private claim. If you are sued on a debt, respond on time and consider raising defenses such as the six-year statute of limitations, lack of proper documentation proving the collector owns the debt, or the collector's failure to be properly licensed.

Filing a complaint with the Indiana Attorney General

The Indiana Attorney General's Consumer Protection Division accepts complaints about debt collectors and collection agencies. You can file a consumer complaint online through the Attorney General's website or by requesting a paper complaint form, and you can call the office's consumer hotline for help. When you file, include the collector's name and address, the amount and type of debt, copies of letters and account statements, your call log, and a clear description of what the collector did wrong. The Attorney General can investigate patterns of unlawful conduct and take enforcement action, and your complaint helps build the record even when the office cannot resolve your individual dispute directly.

To verify any figure in this article — the collection-agency bond amount, current licensing requirements, or the latest complaint process — go to the official sources: the Indiana Secretary of State for collection-agency licensing and the Office of the Indiana Attorney General for consumer-protection complaints. Statutes and dollar amounts change, and confirming directly with the state protects you from acting on outdated information.

Official Indiana Sources

This page is based on Indiana law. Limits and deadlines change — verify the current details directly with the official Indiana sources below. This is general legal information, not legal advice.

• Indiana Attorney General - Consumer Protection Division — official Indiana agency.
• File a Complaint - Indiana Attorney General Consumer Protection Division

Federal law also applies. Federal laws like the Fair Debt Collection Practices Act and Fair Credit Reporting Act protect you nationwide, on top of Indiana’s own rules.