As a business owner or creditor in Indiana, you know that unpaid invoices are more than just numbers on a page—they are a direct hit to your bottom line. But while you focus on running your business, not one, but two critical legal deadlines are quietly ticking in the background.
The first is the Statute of Limitations, which governs your right to sue. The second is the Credit Reporting Time Limit, which dictates how long the debt can impact a consumer’s credit report. Understanding how both of these clocks work is essential for a sound financial strategy. Waiting too long can mean the difference between recovering your assets and writing them off as a total loss.
Clock #1: The Indiana Statute of Limitations (Your Right to Sue)
Think of the statute of limitations as a legal countdown for filing a lawsuit. It’s the maximum time a creditor has to use the courts to compel payment. Once this period expires, the debt becomes “time-barred.”
This doesn’t mean the debt vanishes, but it removes your most powerful collection tool. If you sue over a time-barred debt, the debtor can have the case dismissed, leaving you with no legal recourse.
Key legal deadlines in Indiana include:
- 6 Years for Written Contracts, Oral Contracts, and Open-Ended Accounts (like credit cards).
- 20 Years for enforcing a Court Judgment you have already won.
Clock #2: The FCRA Credit Reporting Limit (The Impact on Credit)
The second clock is governed by the federal Fair Credit Reporting Act (FCRA). This law sets a national limit on how long most negative information, including an unpaid collection account, can remain on a consumer’s credit report.
For most debts, this time limit is 7 years from the date the account first became delinquent and was never brought current.
This is a crucial distinction: even after your legal right to sue has expired, the unpaid debt can continue to negatively affect a consumer’s credit score for several years, providing a powerful incentive for them to resolve the account.
Comparing the Timelines: Lawsuits vs. Credit Reporting
Understanding how these two clocks run in parallel is key. Here’s a direct comparison of common debt types in Indiana:
| Type of Debt | Indiana Statute of Limitations (Deadline to Sue) | FCRA Credit Reporting Limit (Remains on Credit Report) |
|---|---|---|
| Written Contracts | 6 Years | 7 Years from first delinquency |
| Oral Contracts | 6 Years | 7 Years from first delinquency |
| Credit Cards / Open Accounts | 6 Years | 7 Years from first delinquency |
| Medical Debt | 6 Years | 7 Years from first delinquency |
| Court Judgments | 20 Years | 7 Years from filing date (public record) |
As you can see, the window to legally compel payment through the courts is often shorter than the time the debt can remain on a credit report.
The Dangers of Delay: Why You Can’t Afford to Wait
Every day that passes makes debt collection harder, regardless of the deadlines.
- Evidence Fades: Contracts and invoices get misplaced.
- Debtors Disappear: People and businesses move and become harder to locate.
- Assets are Hidden: Debtors have more time to transfer or conceal assets.
Proactive collection efforts send a clear message that you are serious about enforcing your agreements and protecting your financial interests.
Don’t Let the Clocks Run Out on Your Revenue
Navigating Indiana’s collection laws while managing your business is a challenge. You need a partner who understands both the legal and financial leverage points to turn your outstanding debts back into positive cash flow.
Our agency specializes in ethical, effective, and fully compliant debt collection for Indiana businesses. We act with the urgency required to ensure your options are protected and your chances of recovery are maximized before either of these critical clocks expires.
Don’t wonder if you’ve waited too long. Take action.
We invite you to contact us for a free, no-obligation consultation. Let us review your aged accounts and provide a clear, straightforward assessment of your collection options.
