If you’re struggling to manage your debts, you're not alone. Hoosiers carry [an average credit card debt of $5,927, and 12% have past-due balances.

While there's no quick fix, you have legitimate options to ease the burden—if you know where to look.

Because for every legit debt relief program, there are just as many scams ready to dupe you and further trash your credit.

This guide will walk you through smart, legal debt relief choices available to Indiana residents—while also uncovering common schemes to watch out for.

Know your rights under Indiana debt collection laws

Arm yourself with knowledge of debt collection rules in Indiana. They prohibit harassment and limit how much creditors can squeeze you.

Some key protections include:

  • Debt collectors can't file a lawsuit for debts more than **six years** past due—thanks to Indiana's statute of limitations.
  • Collectors are banned from calling you outside of 8am-9pm. And they can't threaten or use obscene language. You can sue violators.
  • Wage garnishment is capped at the lesser of **25%** of disposable earnings or the amount exceeding **30 times** minimum wage per week.

Choose the right type of debt relief

Various programs offer Indiana residents much-needed breathing room. Which option you choose depends on your financial goals and how much risk you can stomach.

Nonprofit credit counseling

Nonprofit credit counseling agencies like GreenPath Financial Wellness and [Money Management Internationa provide Indiana residents:

  • Free budget and debt counseling – unbiased advice on managing bills and achieving financial goals. No sales pitch.
  • Debt management plans – they negotiate lower rates and waived fees so you repay debt faster.
  • Credit education – learn how to build your score and maintain good credit.
  • Avoid bankruptcy – credit counseling gives an alternative to filing Chapter 7 or Chapter 13.

Counseling won't instantly erase your balances. But the savings on interest alone make it worthwhile. Plus, it keeps accounts in good standing and helps climb out of debt without crushing your credit score.

Debt settlement

Debt settlement firms like [National Debt Relief](https://www.nationaldebtrelief.com/indiana/) negotiate with creditors to slash your balances by 30% to 50%—for a price. The steps:

  • You pay enrollment fees upfront – usually 15% to 25% of your debt load.
  • You deposit monthly payments into a special account to fund settlements.
  • Once the balance grows large enough, the company tries settling debts one by one.
  • If a creditor accepts the lowball offer – say 20 or 30 cents on the dollar – that account gets closed out.

Settlement hurts your credit initially. But once the process finishes in 24 to 48 months, the credit damage diminishes, and you're debt-free.

Debt consolidation

Banks and credit unions like FORUM Credit Union offer debt consolidation loans. You roll multiple debts into one new loan with fixed monthly payments.

Benefits include:

  • Lower monthly payments by stretching out the repayment timeline.
  • Potentially reduced interest rates compared to credit cards.
  • Dealing with only one bill each month.

The catch? It takes ironclad discipline not to rack up more credit card debt. Otherwise, you dig can risk a deeper hole.

Bankruptcy: the last resort

Filing Chapter 7 or Chapter 13 bankruptcy stops collections and discharges much-unsecured debt. But it demolishes your credit for years. And the court could liquidate assets to repay creditors.

Bankruptcy lawyers assess if you qualify and walk you through the complex process. See the Indiana Bar Association to find reputable attorneys.

Exhaust all other options before considering bankruptcy. Look at it as a financial lifeboat reserved for emergencies like drowning in medical bills.

Avoid debt relief scams at all costs

Desperate situations attract unsavory schemes that offer false hope. Be vigilant against these classic frauds.

Upfront fee scams

Shady companies promise debt relief after paying hefty upfront or monthly fees. Then they take your money and vanish—or do little to aid negotiations.

Red flags:

  • Pressure to pay fees before rendering services. Legit firms collect fees from actual savings.
  • Refuse to detail the program or provide written contract.
  • Guarantees to make debt "disappear" or halt all collection.
  • Request for monthly fees before settling any debt.

Credit repair scams

Con artists pose as credit repair companies promising fast fixes to bad credit for a fee. But no one can remove legitimate negative marks.

Watch for:

  • Offers to create a "new credit identity" or "repair credit fast."
  • Requests for payment before services.
  • Vague claims about disputing all negative items or past mistakes.
  • "Money-back guarantees" if your score doesn't rise.

If something sounds too good to be true―it probably is. Protect yourself by reporting scammers to the Indiana Attorney General.

Take control with legitimate debt relief

Choosing the right debt solution takes research and brutal honesty about your circumstances.

Nonprofit credit counseling gives the flexibility to repay debt without damage. Debt settlement and bankruptcy offer more drastic measures for those in deep trouble.

Whatever route you take, beware of quick fixes and upfront fees. And know your rights—Indiana law protects you against harassment from collectors.

With the right help and a dose of discipline, you can break loose from the debt trap. The light at the end of the tunnel might seem dim―but it's there if you stay patient and committed.

You’ve got this!