Debt Collection Laws in Indiana
If you're dealing with debt collection in Indiana, here's what actually protects you: a cap on how much of your paycheck can be garnished, a base amount of home equity and bank funds creditors can't touch, and a deadline after which a debt lawsuit generally can't succeed. Current as ofJuly 2026 — sourcing for each section is linked below.
Indiana's 2026 debt outlook
Bankruptcy filings in Indiana ran 18,487 in the 12 months ending March 2026, versus 16,760 the year before (+10.3%), per official U.S. Courts data. See the full 51-state filing ranking.
Serious mortgage delinquency (90+ days late) in Indiana sits at 0.9%, trending toward roughly 1.1% by the end of 2026 (elevated and rising). See the full 51-state outlook and methodology.
Debt collection complaints to the CFPB from Indiana residents ran 2,173 so far in 2026, versus 1,840 over the same window in 2025 (+18%). See the full state-by-state surge ranking.
How much of my paycheck can be garnished in Indiana?
Indiana gives you no extra protection beyond the federal minimum: a creditor can take up to 25% of your disposable weekly earnings, with at least $217.50/week always protected. A 2026 bill that would have raised this went inactive and never became law.
If your weekly disposable earnings are $217.50 or less, ordinary judgment debt can't touch your wages at all — child support garnishment follows separate, higher limits and isn't affected by this cap. Your employer can also deduct a processing fee, the greater of $12 or 3% of the amount withheld, split between you and the creditor.
A 2026 bill (SB 197) would have raised Indiana's wage-garnishment protections substantially, but it went inactive and never passed — the standard federal-equivalent formula above remains current law.
Tier: Federal formula, no state enhancement — see the full 20-state ranking.
Can a creditor take money from my bank account in Indiana?
Indiana protects $450 in bank deposits, cash, or tax refunds — separate from a $12,100 exemption covering other property like furniture or a vehicle. Both figures adjust for inflation every six years.
These figures took effect March 1, 2022 and stay locked until the next adjustment on March 1, 2028. Indiana doesn't have a general 'wildcard' exemption on top of these — some outside sources incorrectly cite a larger wildcard figure that actually applies to other states, not Indiana.
Is my home protected from creditors in Indiana?
Indiana protects $22,750 of equity in your family home, a figure locked in since March 1, 2022 until the next scheduled adjustment in 2028.
Like the personal-property figures above, this number is set by the Department of Financial Institutions on a six-year inflation-adjustment cycle rather than changing whenever Indiana's legislature happens to act, so it climbs steadily over time.
How long can a debt collector sue me in Indiana?
A collector has 6 years to sue you in Indiana, whether the debt came from a written contract like a credit card or just a verbal agreement — both run on the same clock here.
| Debt type | Statute of limitations |
|---|---|
| Credit card / written contract | 6 years |
| Oral or open-account contract | 6 years |
Because both periods are identical, there's less at stake in Indiana over how a particular debt gets classified than in states where written and oral contracts run on different clocks.
See how Indiana's 6 years deadline compares to all 20 states.
Does Indiana have its own debt collection law beyond the federal FDCPA?
A deceptive collection practice in Indiana can trigger state-law damages on top of any federal FDCPA claim, since the state treats debt collection as a regulated 'consumer transaction' under its Deceptive Consumer Sales Act — Indiana doesn't run a general third-party collection-agency licensing regime the way many neighboring states do.
That overlap matters in practice: a deceptive collection practice can support a claim under both the federal FDCPA and Indiana's own deceptive-sales law, which allows treble or statutory damages for repeated violations on top of actual damages — but claims under the state law have to be brought within 2 years of the incident.
Where can I find free or low-cost legal help in Indiana?
If you're dealing with a debt lawsuit, garnishment, or collector dispute in Indiana, a good starting point is the state bar's lawyer referral service or one of the legal aid organizations below — both can point you to self-help court resources even if you don't qualify for free representation.