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Indiana Debt Collection Laws: Time Limits, Garnishment and Your Rights

Indiana debt rules: statute of limitations, wage garnishment limits, protected bank and home exemptions, judgments, collector rules and how to answer a debt lawsuit.

Quick answers for Indiana

Time limit to sue on a written contract
6 years for written contracts for the payment of money (signed after August 31, 1982), such as loans and credit agreements. 10 years for other written contracts. IC 34-11-2-9; IC 34-11-2-11
Wage garnishment limit
Follows the federal limit for ordinary debts: the lesser of 25% of weekly disposable earnings or the amount by which weekly disposable earnings exceed 30 times the federal minimum wage ($217.50 a week). Indiana Small Claims Manual (updated Dec. 23, 2025), Notice of Exemption Rights; 15 U.S.C. § 1673(a)
Money protected in a bank account
No separate bank account exemption. Up to $450 of intangible personal property, which includes bank deposits and cash, is exempt (effective March 1, 2022). Social Security and veterans benefits remain exempt. IC 34-55-10-2(c)(3); 750 IAC 1-1-1(c); Indiana Small Claims Manual, Notice of Exemption Rights
Answering a debt lawsuit
In small claims (up to $10,000), no written answer is required; all defenses are treated as raised. The defendant must appear at the hearing; failing to appear can lead to a default judgment. Ind. Small Claims Rules 4(A)-(B), 10(B)

Last verified: 2026-10-26

Time limits

Time limit to sue on a written contract6 years for written contracts for the payment of money (signed after August 31, 1982), such as loans and credit agreements. 10 years for other written contracts.
Read in the Indiana Code 2026 PDF on the General Assembly site. Which section applies to a given debt can depend on Indiana case law.
Source: IC 34-11-2-9; IC 34-11-2-11
Time limit for credit cards and open accounts6 years for accounts and contracts not in writing.
Source: IC 34-11-2-7
Can a payment restart the clock?An acknowledgment or promise to pay restarts or revives the limitations period only if it is in writing and signed by the debtor.
The effect of a partial payment is not addressed in this statute.
Source: IC 34-11-9-1
How long a judgment lastsEvery judgment is considered satisfied after 20 years.
Source: IC 34-11-2-12

If you are sued

Answering a debt lawsuitIn small claims (up to $10,000), no written answer is required; all defenses are treated as raised. The defendant must appear at the hearing; failing to appear can lead to a default judgment.
Source: Ind. Small Claims Rules 4(A)-(B), 10(B)

Garnishment and what creditors can't take

Wage garnishment limitFollows the federal limit for ordinary debts: the lesser of 25% of weekly disposable earnings or the amount by which weekly disposable earnings exceed 30 times the federal minimum wage ($217.50 a week). Only one garnishment can be paid at a time. A higher percentage may be taken for child support.
Source: Indiana Small Claims Manual (updated Dec. 23, 2025), Notice of Exemption Rights; 15 U.S.C. § 1673(a)
Money protected in a bank accountNo separate bank account exemption. Up to $450 of intangible personal property, which includes bank deposits and cash, is exempt (effective March 1, 2022). Social Security and veterans benefits remain exempt.
The statute's base figure is $300; the Department of Financial Institutions adjusts it every 6 years (IC 34-55-10-2.5). Next adjustment no later than March 1, 2028.
Source: IC 34-55-10-2(c)(3); 750 IAC 1-1-1(c); Indiana Small Claims Manual, Notice of Exemption Rights
Homestead exemptionUp to $22,750 in real or personal property used as the personal or family residence of the debtor or a dependent (effective March 1, 2022). Joint debtors who own property as tenants by the entirety may each claim it, and entireties property may be exempt from debts owed by only one spouse.
Statute (base $15,000): https://iga.in.gov/ic/2026/Title_34/Article_55/Chapter_10.pdf. Adjusted every 6 years by the Department of Financial Institutions; next adjustment no later than March 1, 2028.
Source: IC 34-55-10-2(c)(1), (c)(5); 750 IAC 1-1-1(c)
Vehicle exemptionNo separate vehicle exemption. A vehicle can be protected under the exemption for other real estate or tangible personal property, up to $12,100 in total (effective March 1, 2022).
Statute base $8,000; adjusted every 6 years; next adjustment no later than March 1, 2028.
Source: IC 34-55-10-2(c)(2); 750 IAC 1-1-1(c)
Claiming an exemptionWage garnishment limits are applied automatically. For other exemptions, the debtor must notify the court in writing which specific exemption is being claimed. Courts use a Notice of Exemption Rights form listing common exemptions.
Source: Indiana Small Claims Manual (updated Dec. 23, 2025), Notice of Exemption Rights; IC 34-55-10-3
Bankruptcy exemptionsIndiana has opted out of the federal exemptions. An Indiana debtor in bankruptcy must use Indiana exemptions.
Source: IC 34-55-10-1

Debt collectors and interest

State debt collection lawIndiana's collection agency law (IC 25-11-1) regulates businesses that solicit or collect claims owed to others, including licensing and how collected money must be handled and paid to clients.
Debtor-facing conduct rules are mainly in the federal FDCPA;
Source: IC 25-11-1-1, 25-11-1-7
Debt collector licensingYes. It is unlawful to conduct a collection agency in Indiana without a license under IC 25-11-1. Licenses are issued by the Indiana Secretary of State.
Source: IC 25-11-1-7(a); IC 25-11-1-4
Interest rate limitsJudgments bear interest at the contract rate, but not more than 8% a year, or 8% a year if there was no contract.
Source: IC 24-4.6-1-101

Where to get help in Indiana

Debt & Collections FAQ

What is the statute of limitations on debt in Indiana?
6 years for written contracts for the payment of money (signed after August 31, 1982), such as loans and credit agreements. 10 years for other written contracts.
How long can a creditor sue on a credit card debt in Indiana?
6 years for accounts and contracts not in writing.
Does making a payment restart the statute of limitations in Indiana?
An acknowledgment or promise to pay restarts or revives the limitations period only if it is in writing and signed by the debtor.
How long does a court judgment last in Indiana?
Every judgment is considered satisfied after 20 years.
How much of my wages can be garnished in Indiana?
Follows the federal limit for ordinary debts: the lesser of 25% of weekly disposable earnings or the amount by which weekly disposable earnings exceed 30 times the federal minimum wage ($217.50 a week). Only one garnishment can be paid at a time. A higher percentage may be taken for child support.
How much money in a bank account is protected from creditors in Indiana?
No separate bank account exemption. Up to $450 of intangible personal property, which includes bank deposits and cash, is exempt (effective March 1, 2022). Social Security and veterans benefits remain exempt.
What is the homestead exemption in Indiana?
Up to $22,750 in real or personal property used as the personal or family residence of the debtor or a dependent (effective March 1, 2022). Joint debtors who own property as tenants by the entirety may each claim it, and entireties property may be exempt from debts owed by only one spouse.
Can a creditor take my car in Indiana?
No separate vehicle exemption. A vehicle can be protected under the exemption for other real estate or tangible personal property, up to $12,100 in total (effective March 1, 2022).
What debt collection practices are illegal in Indiana?
Indiana's collection agency law (IC 25-11-1) regulates businesses that solicit or collect claims owed to others, including licensing and how collected money must be handled and paid to clients.
Do debt collectors need a license in Indiana?
Yes. It is unlawful to conduct a collection agency in Indiana without a license under IC 25-11-1. Licenses are issued by the Indiana Secretary of State.
What is the maximum legal interest rate in Indiana?
Judgments bear interest at the contract rate, but not more than 8% a year, or 8% a year if there was no contract.
How do I respond to a debt collection lawsuit in Indiana?
In small claims (up to $10,000), no written answer is required; all defenses are treated as raised. The defendant must appear at the hearing; failing to appear can lead to a default judgment.
How do I stop a garnishment or claim an exemption in Indiana?
Wage garnishment limits are applied automatically. For other exemptions, the debtor must notify the court in writing which specific exemption is being claimed. Courts use a Notice of Exemption Rights form listing common exemptions.
Which bankruptcy exemptions can I use in Indiana?
Indiana has opted out of the federal exemptions. An Indiana debtor in bankruptcy must use Indiana exemptions.

Debt & Collections in other states

More Indiana law

General legal information, not legal advice. Laws change and local rules can differ; check the linked official source or talk to a lawyer about your situation.