Debt is a growing problem in the United States. Not only do thousands of Americans declare bankruptcy every year, but also thousands more go into debt; sometimes $10,000 or more, and usually via consumer debt, such as credit cards or medical bills. If a person owes a sum of money to one or more parties, he/she is said to be in debt, and is often referred to as a debtor. The party to whom the money is owed is called a creditor. When a person’s debt obligation to a person or party grows, with little sign of it being paid off, it is commonplace for that person or party to contact a debt collection agency. While individuals are required to pay their debts, federal law nonetheless offers debtors certain protections under the Fair Debt Collection Practices Act (FDCPA).
Debt Collection in Indiana
In the state of Indiana, debt collection laws mirror those established at the federal level in almost all aspects. Under the debt collection acts at the federal and Indiana state level, any debt that is established as personal, household, or family financial debt is covered by the federal and state statutes of debt collections. These debts may include various differing forms of subcategories of debts, which adhere to distinct statutes of limitations regarding their collection.
Indiana Debt Collection Statute of Limitations
Under Indiana state laws, there are certain periods of time that a debt may remain legally collectable. Debts still outstanding past these statute of limitations periods are no longer legally enforceable. This means that debt collectors or credit collection companies will no longer have a legal right to make any enforceable claims in court to obtain judgments or liens regarding a given expired debt. Some of the statutes of limitations relevant to the state of Indiana include:
- Any contract that is written and details payments to be made has a statute of limitations period of ten (10) years
- Legal judgments have a statute of limitations period of ten (10) years, with an option to renew the period of statute of limitations, if necessary
- Breach of contract for sale debts have a statute of limitations period of no more than four (4) years in Indiana
- Unwritten accounts, promissory notes, and other applicable accounts have a limited statute of limitations period of no more than six (6) years if debt was created after September 1, 1982
Collections Practices and Rules for Indiana
If you owe a large sum of money, the creditor will likely turn your case over to a debt collection agency. They may contact you by phone, fax, email, or mail, provided they do not call before 8:00 am and after 9:00 pm. In addition, they may not call you during working hours if they know your employer forbids personal calls. By law, this initial contact must be followed up five days later with an official notice of your conversation, the amount(s) you owe, and the party(ies) to whom it is owed. Nor may the debt collection agent use profane language, threaten you with a lawsuit, or otherwise attempt to intimidate or harass you.
Legal Collections Actions
- Legal collections actions can take the form of collection attempts made to consumers through personal visits, phone calls, emails, faxes, or letters
- After first contact, collection agencies must send official documentation of notice of contact, which should include various information regarding a debt, the nature of the debt, and the amount, among other items
- Collections actions, when via phone, must be made during reasonable hours, unless a debtor consents to calls at other times
- Collection agencies must speak directly with the debtor regarding the nature of the debt, and cannot disclose the nature of the debt or any other information regarding an outstanding debt owed to anyone but the debtor
Illegal Collections Actions
- Collections attempts made at a debtors place of employment, if prohibited by their employer, are illegal
- Collection attempts using threatening, harassing, or abusive language are prohibited
- Collection attempts made on a debtor that has noted use of legal counsel are prohibited, and all future communication must be made directly to applicable legal counsel
- Threats to seize assets, garnish wages, or otherwise collect on a debt through any means, without the intention or capability to do so, is prohibited by Indiana law
- Misrepresentation of debts, debt collection companies, or other documents is illegal and prohibited
- Publications, advertisements, or other forms of dissemination of information regarding an individual debtor and an outstanding debt obligation is also illegal
Laws for Debt Harassment in Indiana
The Collection Agency Division of the Secretary of State handles all complaints regarding violations by credit collection companies and debt collection agents. The state of Indiana does not tolerate harassment of consumers, regardless of the nature of their debt, nor does the state allow illegal collection actions to go unnoticed. If a debtor is subjected to illegal or harassing collections actions, legal intervention may be possible, which can not only cease harassment, but also, assist in debt settlement.
Indiana Debt Negotiation and Settlement Rules
If the debtor’s records match those of the debt collection agent, he/she may ask if they can negotiate a payment plan. Most collection agencies do comply with such a request. If the debtor’s records do not match those of the debt collection agent, he/she may send a certified letter to the agency stating that they do not owe the funds specified. The agency then has 30 days to respond, and they must provide documentation of the debt.
If you have been contacted by a debt collection agent, you know that it is stressful, time-consuming, and tedious. Given that, financial data is now in cyberspace, this field has great potential for fraud, even if your records are in agreement with the debt collector’s records. Therefore, it is highly advisable to consult with an attorney who specializes in debt collection settlements and negotiations. The benefits of hiring a debt collection settlement attorney are many:
- When the debt collection agent is notified, he/she must cease contacting you, and direct all correspondence to your lawyer;
- The debt collection agent can no longer harass or intimidate you;
- Debt collection laws can be complex; thus, some debt collection agencies may seek to take advantage of your limited knowledge therein. Having an attorney will preclude this;
- Depending on your case, the attorney may be able to prove that you owe less money that you thought;
- The attorney can work with you and the debt collection agency to comprise a fair payment plan.
Help from an Indiana Debt Settlement Lawyer
Should an agent continue to harass you—especially if the debts they are claiming against you are overblown or exaggerated—you may wish to consult with a lawyer who specializes in this field. They can protect you from harassment, and debt agencies must contact them. If debt collection companies continue to directly contact debtors when legal counsel is used, this action is a federal offense. Many other violations of federal debt collection laws are also federal offenses, which result in heavy penalties, fines, and fees. All of this information and others can be used as leverage by consumers when settling their outstanding debt obligations. Through the assistance of an attorney, debtors can use the law and the information regarding debt collection practices to favorably settle their outstanding debt cases.