What Is the Statute of Limitation on Debt in Indiana?
Consumer debt can haunt for many years. However, after a certain number of years, consumers who are taken to court by creditors can call on the statute of limitations as an affirmative defense to avoid paying those old debts. Indiana has relatively long statutes of limitations compared to most other states. Knowing the statute of limitations in Indiana can help you defend yourself from unscrupulous debt collectors should they decide to take you to court.
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Staggered Limits
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In Indiana, there is no set limit for different types of consumer debts. Rather, there is one limit that applies to oral agreements and open accounts, and another longer limit applies to written contracts and promissory notes. Oral contracts are debts where consumers agree to repayment via a verbal agreement or handshake. Written contracts are loan that consumers agree to repay in accordance to terms set in paper. Promissory notes are written contracts in which the scheduled payments and interest to be charged are spelled out. Open-ended accounts are revolving credits lines, such as credit cards.
Year Limits
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Oral agreements and open accounts in Indiana have a statute of limitations of six years. Meanwhile, written contracts and promissory notes have a statute of limitations of 10 years. While many states have similar or longer statutes for oral agreements and open accounts, few have statutes that are similar or longer for written contracts and promissory notes. Kentucky, Ohio and Rhode Island are the only states with longer year limits for these types of debts.
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Significance
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Once a consumer debt covered passes the time limits set forth by Indiana law, consumers who are taken to court by creditors seeking repayment can use the statute of limitations as an affirmative defense and have such lawsuits successfully dismissed.
Understanding When Clock Starts
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The clock starts to run toward the statute of limitations in Indiana from the day that repayment was due, or when a payment was missed for open accounts. However, if you agree to make payments on a debt to a collection agency, you could be restarting the clock, so it's important to be very careful when speaking to debt collectors.
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References
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