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In Indiana, the statute of limitations for most consumer debts, such as credit cards, medical bills, and written contracts, is six years. This means creditors or debt collectors have six years from the date of the last payment or breach to file a lawsuit. After that, the debt becomes "time-barred" and cannot be enforced in court. However, informal collection efforts are still allowed.
Key points to know:
Attempting to sue for time-barred debts violates the Fair Debt Collection Practices Act (FDCPA) and can result in penalties. Debt buyers and collectors must verify the enforceability of debts by confirming the last payment date and monitoring any actions that reset or pause the statute of limitations.
Indiana Debt Collection Statute of Limitations by Debt Type
In Indiana, the timeframe for filing lawsuits over unpaid debts varies depending on the type of debt. For credit card debt and medical debt, the statute of limitations is 6 years. Credit card debt typically falls under written contracts or open accounts, while medical debt, even without a formal written contract, follows the same 6-year rule.
For written contracts related to money payments - like promissory notes or bills of exchange executed after August 31, 1982 - the statute of limitations is also 6 years, as outlined in Indiana Code § 34-11-2-9. However, written contracts unrelated to direct payments, such as mortgages and deeds of trust, have a longer 10-year statute of limitations. Oral contracts and verbal agreements must be acted on within 6 years as well.
When it comes to auto loans and other debts tied to the sale of goods, the Uniform Commercial Code (UCC) sets a shorter 4-year statute of limitations. This applies to retail installment contracts, like those used in auto financing. For court-ordered judgments, the enforcement period is 20 years, with the possibility of renewal for an additional 20 years. Lastly, actions involving deposit accounts must be initiated within 2 years.
The table below provides a clear overview of these time limits, the events that trigger them, and the relevant legal citations.
| Debt Type | Statute of Limitations | Event That Starts the Clock | Legal Citation |
|---|---|---|---|
| Credit Card Debt | 6 Years | Date of last payment or account activity | § 34-11-2-7 or § 34-11-2-9 |
| Medical Debt | 6 Years | Date of breach or last payment | § 34-11-2-7 or § 34-11-2-9 |
| Oral Contracts | 6 Years | Date the agreement was breached | § 34-11-2-7 |
| Written Contracts (Payment of Money) | 6 Years | Date of default or breach | § 34-11-2-9 |
| Written Contracts (Other) | 10 Years | Date the cause of action accrues | § 34-11-2-11 |
| Auto Loans (UCC) | 4 Years | Date of breach of the sales contract | § 26-1-2-725 |
| Promissory Notes | 6 Years | Date of default or acceleration clause | § 34-11-2-9 |
| Judgments | 20 Years (Renewable) | Date of entry of the judgment | § 34-11-2-12 |
| Deposit Accounts | 2 Years | Date the cause of action accrues | § 34-11-2-9(c) |
Knowing when the statute of limitations begins and resets is crucial for managing legal risks and assessing the value of a debt portfolio. The statute of limitations clock starts ticking when the "cause of action accrues" - this is the point when a creditor gains the legal right to file a lawsuit. In most cases, this happens on the date of the last payment or when the account first became delinquent (the date of the first missed payment), whichever comes later. For written or oral contracts, the clock typically begins when the contract is breached.
"The clock generally starts on the date of the last payment or when the account first became delinquent." - Debt Collectors International
In fraud or concealment cases, the statute of limitations may not start until the creditor discovers the fraudulent activity. This is known as the "discovery rule." It can also apply when the creditor couldn’t reasonably have known about the breach until a later date. For debt buyers and collectors, pinpointing the exact date of the last payment - using bank records or invoices - is essential for determining whether the debt is still enforceable under the law.
Certain actions by the debtor can restart the statute of limitations, giving creditors a new timeframe to take legal action. These include making a partial payment on the debt, providing a written acknowledgment of the debt, or agreeing to a new payment plan.
"Generally, the statute of limitation begins to run at the date of first delinquency or last payment made (whichever is later). It is important to note that making a payment to a debt collector can restart the statute of limitation – even if it is about to expire." - Indiana Consumer Lawyer Blog
Other actions, like making a new charge on the account or taking a cash advance, can also reset the clock. For debt buyers, it’s vital to keep detailed records of any written acknowledgments or payment activity, as these can directly affect the enforceability of the debt. Once the clock resets, understanding what might pause the countdown becomes equally important.
Tolling temporarily stops the statute of limitations, effectively extending the time creditors have to take legal action. In Indiana, the clock pauses if the debtor moves out of state, and it remains frozen until the debtor returns or can be served in Indiana. Other scenarios that pause the clock include cases where the debtor is a minor, incarcerated, or legally incapacitated at the time the cause of action accrues. For debt buyers, keeping track of these situations - such as a debtor’s relocation or legal status - is critical, as tolling can push the enforcement period beyond the usual timeframe.
Indiana's statute of limitations plays a key role in determining the value and tradeability of debt portfolios. Debts still within the enforceable 6-year period are highly sought after because they allow for legal actions like court judgments, wage garnishments, and asset seizures. Once this window closes, while informal collection efforts remain lawful, the lack of legal leverage causes a sharp decline in market value. This distinction significantly impacts how aged portfolios are managed and priced.
When buying debt close to or beyond the statute of limitations, there’s a substantial legal risk involved. Attempting to file lawsuits on time-barred debt violates the Fair Debt Collection Practices Act (FDCPA) and can lead to penalties. To avoid this, buyers must confirm the date of the last payment or the initial delinquency using bank records to ensure the debt is still enforceable. Sellers, on the other hand, should categorize their portfolios into "enforceable" (debts within the 6-year limit) and "time-barred" (debts older than 6 years) to set fair pricing and avoid compliance issues.
Portfolios with debts where the statute has been reset - such as through partial payments or written acknowledgments - tend to fetch higher prices because the enforceability window resets based on those activities. Judgment debts, which have a 20-year enforceability period and can be renewed, are considered especially valuable compared to standard consumer accounts. Buyers should also keep an eye out for tolling events, like a debtor moving out of state, as these can pause the statute of limitations and extend the enforceable period unexpectedly.
The age of the debt and the time left within the enforceable window are major factors in determining portfolio value. For instance, a credit card account with only 2 years remaining before the 6-year limit will usually sell for less than one with 5 years left. Similarly, judgment debt, with its 20-year lifespan, is far more valuable than standard written contracts. Buyers often prioritize debts nearing the 6-year limit to maximize recovery efforts before legal remedies expire.
| Debt Type | Indiana Statute of Limitations | Impact on Trading/Valuation |
|---|---|---|
| Credit Card / Open Accounts | 6 Years | High liquidity; value drops sharply after 6 years |
| Promissory Notes | 6 Years | Standard valuation; enforceable for 6 years |
| Mortgages | 10 Years | Higher long-term value due to extended enforceability |
| Judgments | 20 Years | Premium asset; long-term enforceability with renewals |
| Oral Contracts | 6 Years | Lower value due to difficulty proving in court |
Take the case of Collins Asset Group v. Alkhemer Alialy. The defendant defaulted on a mortgage in July 2008, and the debt was later sold to Collins Asset Group in October 2016. Despite the original default occurring nearly nine years earlier, the Indiana Supreme Court ruled in favor of the plaintiff. Why? The 6-year statute of limitations on the promissory note began when the acceleration clause was exercised in 2016, making the 2017 lawsuit timely. This case highlights how acceleration clauses can preserve enforceability and maintain the value of older debts.
Given these complexities, robust analytics are essential for reducing risk and maximizing returns.
Debexpert’s platform provides tools to help buyers and sellers navigate statute of limitations deadlines while staying compliant. Through features like secure file sharing, buyers can review critical documents - such as last payment dates or written acknowledgments - before making a purchase. Sellers can use portfolio analytics to organize accounts by debt age and type, ensuring accurate pricing and transparent disclosure during auctions.
Debexpert also offers real-time chat and notifications, allowing buyers to ask questions about debt age, tolling events, or reset activities before placing bids. By clearly documenting the statute of limitations status for each portfolio, sellers can reduce legal risks and often secure better pricing. This methodical approach to tracking legal timelines helps both buyers and sellers refine their strategies and achieve stronger outcomes, all while adhering to regulatory guidelines.
Navigating Indiana's statute of limitations requires careful attention to detail. Proper verification, documentation, and tracking are essential to avoid legal trouble while maintaining portfolio performance. Here’s how debt buyers and collectors can stay on the right side of the law.
Never rely solely on summaries provided by sellers - always dig deeper. Request original contracts, invoices, and payment ledgers to confirm the last payment date. Whenever possible, cross-check these records with bank statements or digital transaction logs.
"If your last payment was made over 6 years before the debt collector filed their lawsuit, a court can't make you pay a dime."
Start by identifying the type of debt. Written contracts, open accounts, and promissory notes typically have a 6-year statute of limitations, while debts related to the sale of goods have a 4-year limit. Pinpoint the accrual date, which usually begins with the first delinquency or the last payment. Be cautious - this "last date of activity" might differ from when the account was marked overdue. Screen portfolios for actions that could restart the clock, like partial payments or written acknowledgments, and document any events that might pause the statute timer.
Detailed records are your best defense if the enforceability of a debt is ever questioned. Keep track of any actions that might reset the statute of limitations, such as:
Make sure to retain debtor acknowledgments, as these can reset the 6-year clock. When purchasing portfolios, insist on receiving a complete chain of title and a verified payment history to avoid acquiring debts that are already time-barred.
Automated tools can simplify compliance and reduce risks. Platforms like Debexpert allow buyers to securely review essential documents - such as last payment dates and written acknowledgments - before finalizing a purchase. Sellers can also leverage portfolio analytics to categorize accounts by debt age and type, ensuring accurate pricing and transparency.
Set up automated alerts and tracking systems to monitor debts approaching the 6-year limit. These tools can also flag reset triggers like partial payments or acknowledgments. Digital verification methods, such as online bank records and court document databases, help confirm the exact date of the last payment or delinquency. Advanced collection platforms with reporting dashboards ensure all activities comply with Indiana's statute of limitations and FDCPA regulations. By using these systematic tracking methods, you can safeguard your legal standing while preserving portfolio value.
Knowing Indiana's statute of limitations is crucial when dealing with debt trading and collection. The six-year limit for written contracts, oral agreements, and credit card debt determines whether your portfolio contains enforceable accounts or aging debts with limited recovery potential. Once that time runs out, the ability to seek a court judgment disappears.
Attempting to file lawsuits on time-barred debts can result in penalties - up to $1,000 under the FDCPA - and Indiana may impose civil fines of up to $10,000 per violation. These risks can take a direct toll on your financial returns.
Protecting the value of your portfolio requires thorough verification and documentation. Successful debt buyers focus on accuracy over sheer volume. Before purchasing, confirm the date of last activity, identify reset triggers like partial payments or written acknowledgments, and separate accounts based on enforceability. Debts still within the six-year limit are more valuable because they carry the option of legal action, which significantly influences portfolio pricing.
To manage this process efficiently, technology becomes a key ally. Tools like Debexpert offer the ability to review payment histories, monitor statute deadlines, and maintain the documentation needed to confirm enforceability. By combining careful due diligence with automated systems, you can safeguard your legal position and get the most out of every account in your portfolio.
To determine the last payment date on a debt, start by reviewing your personal records. This could include bank statements, payment receipts, or account statements from the creditor or collection agency. If you have online access to your account, check the payment history section for details. Additionally, correspondence or account summaries from the creditor might list the date. If you still can't find the information, reach out to the creditor or collection agency directly to confirm the payment date.
When dealing with debt lawsuits in Indiana, it’s important to know that making even a small payment can reset the statute of limitations. This means that by making a payment or acknowledging the debt, you could restart the clock, giving creditors additional time to file a lawsuit against you.
If a collector takes legal action against you in Indiana for a debt that's past its statute of limitations, you can use this as a defense. For most debts, the statute of limitations in Indiana is typically 6 years. Once this time frame has passed, the debt is no longer legally enforceable. Carefully review the lawsuit to verify the dates, and if the debt is time-barred, you can file a motion to dismiss. It's a good idea to consult a legal professional to ensure your rights are fully protected.
More than a decade of Ivan's career has been dedicated to Finance, Banking and Digital Solutions. From these three areas, the idea of a fintech solution called Debepxert was born. He started his career in Big Four consulting and continued in the industry, working as a CFO for publicly traded and digital companies. Ivan came into the debt industry in 2019, when company Debexpert started its first operations. Over the past few years the company, following his lead, has become a technological leader in the US, opened its offices in 10 countries and achieved a record level of sales - 700 debt portfolios per year.
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