What is Indiana’s statute of limitations on debt?
If you live in Indiana and have a debt creditor pestering you for payment on an old credit account, knowing the statute of limitations in the Hoosier state can save you thousands.
Depending on the type of debt, creditors have a set number of years to file a lawsuit against you to collect the money you owe.
If the creditor files after the legally set period of time—known as the “statute of limitations”—you may be off the hook for the debt entirely.
The more you know about the debt statute of limitations in Indiana, the more control you will have over a past-due debt.
What is a statute of limitations on debt?
Legally, a creditor has a set amount of time to take action against a consumer for an unpaid debt. Depending on the type of debt, a different statute of limitations may apply.
If a creditor files a claim against an unpaid debt after the state’s statute of limitations has expired, the debt doesn’t disappear. A creditor can still take you to court, but will have a lower chance of winning this battle in an Indiana court.
What are Indiana’s statutes of limitations for debt accounts?
In Indiana, the statute of limitations for debt varies depending on the type of debt and when the account was opened.
Here’s the timeline creditors currently have to go after an unpaid debt in Indiana:
|Type of debt
|Indiana statute of limitations
|Sales of goods
|4 to 10 years*
|6 to 10 years
*If you have a written contract debt that predates September 1, 1982, the statute of limitations increases to ten years.
So, for example, if you have credit card debt from 2015 and the credit card company has not pursued legal action against you, but decides to in 2023, in Indiana the statute of limitations on that debt will have expired.
The card company could still sue you, but you could use the statute of limitations defense in court.
Ways to reconcile debt within Indiana’s statute of limitations
Hoping a creditor doesn’t come after you until the statute of limitations for debt in Indiana expires could leave you facing legal action.
To address your debt, you may consider a few of the most popular debt repayment strategies.
Debt avalanche method
Following the debt avalanche method means focusing on debts with the highest interest rates first. Once the first debt is paid off, shift the funds you were using toward that payment to the next highest interest-rate debt, and so on.
But of course, continue to make at least the minimum payments on all other debts during this time.
Debt snowball method
While many experts encourage you to focus on the highest interest debt first, it’s not a strategy that works well for everyone.
Another tactic, the debt snowball method, may help keep you more motivated to work on your debt.
Here’s how that strategy works.
You make the minimum payment on all your debts, but focus on putting more than the minimum toward your smallest balance debt. Once that balance is paid off, move on to the next smallest, and so on.
This method doesn’t save you the most in interest, but it offers small debt payoff wins, keeping you motivated and encouraged as you strike down debt.
Debt consolidation loan
If you’re overwhelmed by a large number of debts or facing steep interest charges, consider a debt consolidation loan to lower your interest rate and combine all your debts into one monthly payment.
Lender payment plan
Sometimes reaching out to your credit card, medical debt, or loan companies can pay off.
If you’re facing financial challenges, the company may set you up with a more affordable payment plan, temporarily pause or lower interest, or put you into deferment to pause your payments for a period of time.
Companies aren’t required to do this, but it never hurts to ask.
Balance transfer credit card
Could you pay down your debts if you had an extra year? If so, a balance transfer credit card can offer you a respite on interest for a period of time.
Balance transfer cards typically require good to excellent credit scores (think a 660 FICO score and up), and many charge a 3% to 5% balance transfer fee.
But, even with those fees, you can save hundreds to thousands in interest if you repay your balance in full before the introductory APR period expires.
As a last resort, filing bankruptcy may be your best option to wipe your slate clean without having to worry about the debt statute of limitations in Indiana.
Filing for bankruptcy can severely lower your credit score and is not an option you should consider lightly. It’s best to talk to an experienced debt counselor or financial attorney before taking this route.
What to do if a creditor sues you for a past-due debt
Finding a debt repayment plan that works for you can help you tackle your debt head-on without worrying about creditors coming after you before the Indiana statute of limitations for debt expires.
But if you think a creditor is suing you for an unpaid debt past Indiana’s statute of limitations, reach out to a financial attorney to protect yourself.
You may no longer be legally required to repay the debt if the creditor waited too long to take you to court.
Debt resources in Indiana
If you’re being sued by a creditor, a financial attorney can explain your rights and the best next steps to take. An attorney can also help you understand if the Indiana statute of limitations for debt has expired.
Nonprofit debt counseling services like InCharge can also connect you to debt counselors and attorneys. Indiana also offers an online service, Indiana Debt Relief, to connect you to state and federal resources, as well as local debt counselors.