Credit card companies have a limited amount of time to file a lawsuit against you for a charged-off debt. Indiana, like all states, has a statute of limitations on debt collection: Once it has passed, a creditor has to either accept the loss or try and persuade you to pay the bill without a court judgment.
Indiana Statute of Limitations
In Indiana, a credit card company or debt collector has six years to sue you for unpaid credit card debt. After the six years is up, if you are sued for the debt, you can ask the court to dismiss your case because the debt is too old for collection. Credit bureaus can include this information for up to seven years after you default on your account.
Statute of Limitations on Judgments
If your creditor does take you to court over the debt, it has a much longer time to collect its lawsuit. Indiana law grants judgment creditors 20 years to collect a debt that doesn't involve real estate. Judgments stay on your credit report for up to seven years if paid, or until the statute of limitations runs out on an unpaid judgment.
Why You Still May Need To Pay
Just because your debt is past the Indiana statute of limitations doesn't mean that you may not need, or want, to pay up. Some potential creditors, such as mortgage lending companies, may demand that you pay or settle an old account before approving you for a loan. Additionally, there are debt collection companies that specialize in collecting old, out-of-statute debts. These bill collectors buy up old debt, usually for a small fraction of its value, and then try to collect.They may repeatedly try contacting you by phone or by mail, and some might even try to sue you. While there are ways of stopping these companies from engaging in further harassment, there is nothing that prevents the debt collector from reselling your debt. If this happens, you'll have to repeat the steps you took with the first collection agency.
Protecting Yourself
Don't ignore a letter from a bill collector: If you believe the debt is no longer collectible under Indiana's statute of limitations, invoke your rights under the Fair Debt Collection Practices Act and send the collector a letter stating that the debt is no longer collectible and that the collector should stop contacting you. If the debt collector tries to sue you, go to court: If you don't, the collector can win a default judgment against you, even if the debt is out of statute. Show up in court, preferably with a lawyer.
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