Business Debt Restructuring in Indiana: 7 Laws That Change Your Leverage (2026)

The Indiana Statute That Decides Who Has to Sue Whom

Most states that got rid of the confession of judgment did it by voiding the clause and leaving the rest of the collection machinery untouched. Indiana wrote a second sentence. That second sentence is the most valuable thing an Indiana business owner can learn about an advance file. Ind. Code §34-54-3-3 makes a contract, stipulation, or power of attorney given or entered into before a cause of action accrues on a promise to pay void, and Ind. Code §34-54-3-4 then instructs an Indiana court what to do when a creditor arrives holding a judgment another state entered on that kind of paper: the court shall not issue an execution or other process to aid or enforce the collection of it, and the judgment may not become a lien upon real estate.

That combination matters here more than it would almost anywhere else because of how the advance industry builds its documents. A large share of the paper funded into Indiana over the last decade was drafted in New York, signed with a confession of judgment attached, and priced on the assumption that a default turns into an enforceable judgment within about a week. Getting that judgment into Indiana is genuinely easy, since Ind. Code §34-54-11-1 lets the creditor file an authenticated copy with the clerk of any court of record in any Indiana county and have it treated exactly as an Indiana judgment would be. Turning it into money out of an Indiana account is the step the recovery model may have assumed rather than checked.

None of that means an Indiana file is safe. The other six bodies of law on this page run from the paper to the bank balance: what Indiana does and does not do about rate, what it never enacted about disclosure, how far back a creditor reaches for assets you already moved, how fast a verified motion under Trial Rule 69(E) reaches your operating account, which unfair practices statute your company can actually use, and what a personal guaranty leaves you standing on once the judgment carries your own name. Read them in that order, because the early ones decide whether the later ones ever matter.

1. The New York Judgment That Cannot Execute Here

A confession of judgment clause appoints an attorney the funder selects to walk into a courthouse, admit your liability for you, and take judgment without a summons ever reaching you. Ind. Code §34-54-3-1 describes the device three ways, and an advance agreement usually triggers all three: a power of attorney authorizing someone to appear in a court of record and waive service of process in an action to enforce payment, an authorization for an attorney or agent, however designated, to confess judgment for a sum to be ascertained in a manner other than by action of the court upon a hearing after notice to the debtor, and an authorization to release errors, give up the right of appeal, and consent to the issue of execution. Ind. Code §34-54-3-2 forbids executing or procuring such a provision in connection with a negotiable instrument or other written contract to pay money before a cause of action on it has accrued.

Ind. Code §34-54-3-3 supplies the consequence in a single line: a contract, stipulation, or power of attorney given or entered into before a cause of action accrues on a promise to pay is void. What makes Indiana unusual is §34-54-3-4, which reaches past the clause to the judgment it produced in another courtroom. Subsection (a) applies wherever the foreign court obtained or attempted to obtain jurisdiction of the judgment debtor, in whole or in part, by virtue of a provision this chapter declares void. Subsection (b) then says an Indiana court shall not issue an execution or other process to aid or enforce the collection of a judgment taken in another state or foreign country that was founded or based upon an instrument carrying such a provision, and subsection (c) says that judgment may not become a lien upon real estate.

From the funder’s side of the table this is a pricing problem rather than a legal curiosity. A receivables desk that files a confession in New York on a Tuesday is modeling cash recovery in weeks, not quarters, and the whole appeal of the device is that it converts a contested collection matter into a clerical filing. Domestication in Indiana under Ind. Code §34-54-11-1 gives the creditor a judgment that is subject to the same procedures, defenses, and proceedings for reopening, vacating, or staying as one entered by an Indiana court, and Ind. Code §34-54-11-2 requires an affidavit with the debtor’s last known address, a notice mailed by the clerk, proof of mailing by the creditor, and no execution or other process earlier than twenty one days after entry. A funder that learns during those twenty one days that §34-54-3-4 sits between it and your account has a materially weaker file than the one it underwrote.

The honest limits are worth stating before anyone builds a strategy on this. Sections 2 and 3 of the chapter are written around instruments given before a cause of action accrued, so a stipulated judgment negotiated and signed after a default, as part of a settlement, is a different document on the face of the statute and gets analyzed separately. The bar in §34-54-3-4 runs to execution and to real estate liens, not to the existence of the judgment, which can still be enforced in states that will execute on it and still shows up in every credit and litigation search a future lender runs. Whether your particular clause and your particular foreign judgment fall inside the chapter is a question for an Indiana litigator with the docket in front of them, and our page on how Indiana MCA defense files get worked covers what that review looks like.

2. Indiana Caps the Judgment, Not the Advance

Indiana has no general usury ceiling that a commercial advance runs into. Ind. Code §24-4.6-1-102 supplies a gap filler rather than a limit, providing that when the parties do not agree on the rate, interest on loans or forbearances of money, goods, or things in action runs at eight percent per annum until payment of judgment. Ind. Code §24-4.6-1-103 does the same work for two other situations, allowing eight percent from the date of settlement on written instruments that fix no rate and are not covered by the consumer credit code, and from the date an itemized bill is rendered and payment demanded on accounts stated, closed accounts, and money retained without the owner’s consent. Neither section tells parties who did agree on a rate that their number is too high.

The statute that does cap rates never reaches your company. Ind. Code §24-4.5-1-301.5 defines a consumer loan as one where the debtor is a person other than an organization and the debt is primarily for a personal, family, or household purpose, and the same section defines an organization to include a corporation, a partnership, a limited liability company, a cooperative, an association, a joint venture, and any other entity however organized. Your operating company is an organization, so the supervised lending ceilings at Ind. Code §24-4.5-3-508(2), which run to the greater of thirty six percent on the first two thousand dollars stepping down through twenty one and fifteen percent or a flat twenty five percent per year on unpaid balances, describe a market your advance was never in.

The correction we give most often on Indiana calls concerns the loansharking statute, because owners find it online and assume it saves them. Ind. Code §35-45-7-2 makes it a Level 6 felony to knowingly or intentionally receive or contract to receive consideration at a rate greater than two times the rate specified in Ind. Code §24-4.5-3-508(2)(a)(i), which sets the criminal line above seventy two percent per year, and raises the offense to a Level 5 felony where force or the threat of force is used to collect. Ind. Code §35-45-7-3 then limits the chapter to consumer transactions as the consumer credit code defines them, to mortgage transactions that qualify as consumer loans or credit sales, and to any other loan transaction or extension of credit, regardless of the amount of the principal, only where unlawful force or the threat of force is used in collection. An advance to an Indiana limited liability company sits outside all of it absent force.

The rate rule that actually moves money in an Indiana workout runs the other direction. Ind. Code §24-4.6-1-101 provides that interest on judgments runs from the date of the return of the verdict or the finding of the court until satisfaction at the rate agreed upon in the original contract sued upon, which shall not exceed an annual rate of eight percent even though a higher rate of interest may properly have been charged according to the contract prior to judgment, or at eight percent where there was no contract. A funder that wrote a twenty four percent default rate into the agreement carries eight percent onto an Indiana judgment and no more, which means the passage of time costs an Indiana judgment debtor far less than it costs one in a state that lets the contract rate ride. That single asymmetry is why a longer, smaller payment structure is often defensible in Indiana on arithmetic a funder’s own model will confirm.

3. Nobody in Indianapolis Registers Your Funder

As of August 2026, the Indiana Code contains no commercial financing disclosure requirement. No Indiana statute obliges a funder to hand your business a page showing the amount financed, the amount you will actually receive after fees, the total repayment, the finance charge, or an estimated annual percentage rate, and no Indiana agency licenses or registers small business finance providers as such. Eleven United States jurisdictions have enacted a commercial financing disclosure or broker statute: California, Connecticut, Florida, Georgia, Kansas, Louisiana, Missouri, New York, Texas, Utah, and Virginia. Indiana is not one of them. Anyone telling an Indiana owner that a missing disclosure voids the advance is describing another state’s law without checking whether it travels.

The statute Indiana owners reach for next is the Loan Broker Act at Ind. Code §23-2.5, and it does not fit either. Ind. Code §23-2.5-1-14 defines a loan broker as a person who, in return for consideration from any source, procures, attempts to procure, or assists in procuring a residential mortgage loan from a third party, regardless of whether the person seeking the loan obtains it. Residential mortgage loan is the operative phrase, and it removes commercial finance brokers from the definition entirely. The section then excludes supervised financial organizations such as banks, savings banks, trust companies, savings associations, and credit unions, other regulated financial institutions that regularly make consumer loans not secured by real estate, insurance companies, persons arranging financing for the sale of their own product, and creditors licensed under Ind. Code §24-4.4-2-402. The broker who called you eleven times before the wire cleared is not registered with anyone in Indiana, because Indiana does not require it.

What fills the gap is the transaction record, and in a state with no regulator the record has to be built rather than requested. The questions that produce Indiana leverage are whether the agreement is a true purchase of future receivables or a loan wearing that label, whether the reconciliation provision was honored when your revenue fell, whether the funder followed its own default and acceleration terms before declaring the balance due, where each UCC-1 sits in filing order against the others, whether a broker collected a fee before funding, and whether the payoff amounts wired to earlier positions match what those funders actually released. Every one of those is answerable from documents you already have, and each of them survives the absence of a disclosure statute.

The choice of law clause deserves a separate look, because your Indiana agreement almost certainly names another state. A clause pointing at New York can pull New York Financial Services Law article 8 disclosure obligations into a conversation about a transaction an Indiana business signed, and it can pull other New York rules along with it. Whether an Indiana court enforces that clause on any given issue is a live question rather than a settled one, and it is worth asking counsel before assuming either answer. Our overview of how Indiana business debt settlement files get priced walks through what a stack looks like once the paperwork questions have been answered.

4. The Code Says Fraudulent, the Text Says Voidable

Chapter 2 of article 18 in title 32 is still headed the Uniform Fraudulent Transfer Act, and the heading is a trap. Ind. Code §32-18-2-23 states that the chapter adopts, in part, provisions of the Uniform Voidable Transactions Act as released by the National Conference of Commissioners on Uniform State Laws, and that it may be cited as the Indiana Uniform Voidable Transactions Act. The operative sections use voidable rather than fraudulent, the modern burden of proof language is present, and the current framework took effect in 2017. Section 23 adds a limitation that lawyers from other states walk into regularly: the uniform act’s committee comments may not be used as authority in interpreting this chapter standing alone.

The two theories live in Ind. Code §32-18-2-14(a). Paragraph (1) reaches a transfer made or an obligation incurred with actual intent to hinder, delay, or defraud any creditor of the debtor, and it applies whether the creditor’s claim arose before or after the transfer. Paragraph (2) requires no intent at all: the debtor did not receive a reasonably equivalent value, and either the remaining assets were unreasonably small for a business or transaction it was engaged in or about to engage in, or it believed or reasonably should have believed it would incur debts beyond its ability to pay as they came due. Subsection (b) lists the factors a court may weigh on intent, among them retained possession or control after the transfer, concealment, a pending or threatened suit, a transfer of substantially all assets, the adequacy of consideration, and insolvency at or shortly after the transfer. Subsection (c) places the burden on the creditor by a preponderance of the evidence.

Ind. Code §32-18-2-15 covers the creditor who already existed, reaching a transfer made for less than a reasonably equivalent value at a time when the debtor was insolvent or was rendered insolvent by it, again on a preponderance standard. Ind. Code §32-18-2-16 decides the date, and the timing rules are stricter than owners expect. A transfer of real property is made when it is so far perfected that a good faith purchaser from the debtor cannot acquire a superior interest, a transfer of other property is made when a creditor on a simple contract cannot acquire a superior judicial lien, and a transfer that could have been perfected but was not before an action is commenced is treated as made immediately before the action begins. Backdating a bill of sale accomplishes nothing under that section, because perfection rather than paperwork sets the clock.

The remedies at Ind. Code §32-18-2-17 explain why this chapter shapes a restructuring plan before the plan is drafted. A creditor may obtain avoidance of the transfer to the extent necessary to satisfy its claim, an attachment or other provisional remedy against the transferred asset or other property of the transferee under Ind. Code §34-25-2-1, an injunction against further disposition by the debtor or the transferee, appointment of a receiver over the transferred asset or the transferee’s property, and any other relief the circumstances require, and once judgment enters the court may order execution levied on the asset transferred or its proceeds. That is not an argument for freezing every business decision, and it is not an argument for quietly reorganizing either. It is why every asset move contemplated during an Indiana workout gets dated, valued, and papered by counsel in advance rather than explained under oath afterward.

5. One Verified Motion Reaches Your Bank

Indiana does not make a judgment creditor file a fresh lawsuit to collect. Ind. Trial Rule 69(E) opens with the words “Notwithstanding any other statute to the contrary, proceedings supplemental to execution may be enforced by verified motion or with affidavits in the court where the judgment is rendered alleging generally,” and then lists four allegations: that the plaintiff owns the described judgment against the defendant, that the plaintiff has no cause to believe that levy of execution against the defendant will satisfy the judgment, that the defendant be ordered to appear before the court to answer as to non-exempt property subject to execution or to apply such property toward satisfaction of the judgment, and, if any person is named as garnishee, that the garnishee has or will have specified or unspecified nonexempt property of, or an obligation owing to, the judgment debtor, and that the garnishee be ordered to appear and answer concerning it or answer interrogatories submitted with the motion.

That is a motion in a case that already exists, which is why an Indiana file moves faster than the same file in a state requiring a new garnishment proceeding with its own complaint, filing fee, and summons. The motion and the court’s order are served on the judgment debtor under Trial Rule 5, garnishees are served with process under Trial Rule 4, and the date fixed for appearance and hearing or for answer to interrogatories shall be not less than twenty days after service. Twenty days is the floor, not the norm, and it is measured from service rather than from filing. The bank named as garnishee is on the same track as you are, and it receives the paper whether or not you have responded to anything.

The freeze itself comes from Ind. Code §34-25-3-3, which provides that from the day of the service of the summons the garnishee is accountable to the plaintiff in the action for the amount of money, property, or credits in the garnishee’s possession or due and owing from the garnishee to the defendant. A bank that reads that sentence and then releases your balance to you has bought itself a problem, so it holds. Payroll runs through that account, your merchant processor settles into it, and the vendor ACH you scheduled for Friday is drawn on it, which is why the practical damage from an Indiana proceeding supplemental usually lands on operations rather than on the judgment balance. If the creditor goes after an individual guarantor’s wages instead, Ind. Code §24-4.5-5-105 holds the weekly deduction to the lesser of twenty five percent of disposable earnings or the amount by which those earnings exceed thirty times the federal minimum hourly wage.

Two clocks bracket all of it. Ind. Code §34-55-9-2 makes a money judgment a lien on the debtor’s real estate and chattels real in the county where it was entered, running from entry and indexing for ten years and excluding periods during which the creditor was blocked by an appeal, a court injunction, the defendant’s death, or a written agreement, and Ind. Code §34-11-2-12 provides that every judgment and decree shall be considered satisfied after the expiration of twenty years. Before judgment the creditor’s options are narrow, because Ind. Code §34-25-2-1 allows attachment only on specified grounds such as nonresidency, secretly leaving the state with intent to defraud, concealment defeating service, removing property subject to execution out of Indiana without leaving enough behind, or disposing of property with fraudulent intent. The useful work in an Indiana file therefore happens in the window before a judgment exists, because after one exists a single verified motion is all the creditor needs.

6. Your Company Is a Person and Still Loses

Indiana’s Deceptive Consumer Sales Act is unusual in a way that misleads people in both directions. Ind. Code §24-5-0.5-2 defines person to include an individual, a corporation, the state of Indiana and its subdivisions or agencies, a business trust, an estate, a trust, a partnership, an association, a nonprofit corporation or organization, a cooperative, or any other legal entity, so being a limited liability company is not what keeps your business out. A supplier is a seller, lessor, assignor, or other person who regularly engages in or solicits consumer transactions, which describes a great many funders and brokers, so corporate form is not what closes the door on an Indiana business.

What closes it is purpose. The same section defines a consumer transaction as a sale, lease, assignment, award by chance, or other disposition of an item of personal property, real property, a service, or an intangible to a person for purposes that are primarily personal, familial, charitable, agricultural, or household, or a solicitation to supply any of those things. Most state acts stop at personal, family, or household. Indiana adds charitable and agricultural, and that addition is not decorative: an Indiana grain or livestock operation buying a service for agricultural purposes, and a nonprofit buying for charitable ones, are inside a definition that excludes a staffing agency or a trucking company doing the same thing. Whether a specific advance to an Indiana farm entity clears that test is a question worth putting to counsel rather than assuming in either direction. The statute also sweeps in enumerated categories regardless of purpose, among them debt collection activities and structured settlement payment transfers.

Where the act does apply, the remedies at Ind. Code §24-5-0.5-4 are real but modest. A person relying on an uncured or incurable deceptive act may recover the damages actually suffered or five hundred dollars, whichever is greater, and a court may increase damages for a willful deceptive act up to three times actual damages or one thousand dollars, whichever is greater. Classes of consumers may proceed under subsection (b), the attorney general under subsection (c), and reasonable attorney fees may be awarded to the party that prevails, except where a timely offer to cure delivered before the supplier’s initial response exceeds the damages ultimately awarded. That fee provision cuts in both directions, which is a reason to plead the count deliberately rather than reflexively.

The deadlines are short enough to end the discussion on their own. Ind. Code §24-5-0.5-5 requires written notice to the supplier within the sooner of six months after the initial discovery of the deceptive act or one year following the consumer transaction, subject to a warranty period floor of thirty days, and no action under section 4(a) or 4(b) may be brought more than two years after the occurrence of the deceptive act, while the attorney general has five. In the Indiana files we work, the live claims usually sit in breach of contract, fraud in the inducement, and recharacterization of the advance as a loan, with a deceptive practices count added only where the transaction actually meets the purpose definition and the sales conduct is documented in writing.

7. What Your Spouse Did Not Sign

Once a personal guaranty becomes a judgment against you individually, Ind. Code §34-55-10-2 is the entire list of what a creditor cannot take. The section applies to judgments obtained on or after October 1, 1977, and subsection (b) provides that the dollar figures printed in the statute apply only until the department of financial institutions adopts a rule under Ind. Code §34-55-10-2.5. It has, so the printed numbers of fifteen thousand dollars, eight thousand dollars, and three hundred dollars are historical. The operative figures took effect March 1, 2022: $22,750 for real estate or personal property constituting the personal or family residence of the debtor or a dependent, $12,100 for other real estate or tangible personal property, and $450 for intangible personal property including choses in action, deposit accounts, and cash, excluding debts owing and income owing.

The adjustment mechanism is worth understanding because it means the numbers hold still for years at a time. Ind. Code §34-55-10-2.5 directs the department of financial institutions to adopt a rule between January 1 and March 1 of the sixth calendar year following the previous adjustment, based on the change in the Consumer Price Index for All Urban Consumers over that period, rounded to the nearest fifty dollars and never set below the July 1, 2005 levels. The next window opens January 1, 2028, so the March 2022 figures are the ones a creditor and a debtor are both working from through the whole of 2026 and 2027. Notice also what Indiana does not have: no separate motor vehicle exemption and no named tools of trade category, which means a work truck, a trailer, and a shop full of equipment all compete for the same $12,100.

The provision that changes outcomes most is the one nobody reads until it is too late. Ind. Code §34-55-10-2(c)(5) exempts any interest the debtor has in real estate held as a tenant by the entireties, and it removes that exemption only for a debt for which the debtor and the spouse are jointly liable. Subsection (c)(1) separately makes the residence exemption individually available to joint debtors as to entireties property, and subsection (d) provides that a bankruptcy proceeding resulting in estate ownership of an entireties interest does not sever the tenancy. If one spouse signed the guaranty and the marital residence is titled by the entireties, the creditor is looking at an interest Indiana protects. If the funder collected a second signature at closing, that protection is gone, and the second signature usually took four seconds to obtain. Our page on what a personal guarantee actually obligates you to covers how those signatures get collected and what can be done about them.

The rest of the section is a mix of full and partial shelters, and the practical point is that none of it protects the business. Professionally prescribed health aids are exempt outright, as are qualifying interests in retirement plans and funds, money in a medical care savings account under Ind. Code §6-8-11, money in a health savings account, tuition and education savings account interests subject to a five thousand dollar aggregate ceiling, refunds under the federal and Indiana earned income tax credits, and veterans disability benefits awarded for a service connected disability. Subsection (e) removes the protection where you voluntarily granted a lien, to the extent of the balance due on that secured debt. And every one of these exemptions belongs to a debtor domiciled in Indiana, meaning a natural person: the operating account in your company’s name is the company’s asset and nothing on this list covers it.

The Financing Statements Keep Working While You Negotiate

Indiana enacted Article 9 of the Uniform Commercial Code at Ind. Code §26-1-9.1, and the sections that decide who gets your receivables carry the uniform text. Priority among conflicting perfected security interests generally runs to the first to file or perfect, so the funder holding the oldest financing statement usually has the strongest claim to the same receivables three other funders think they bought. Ind. Code §26-1-9.1-406 lets an account debtor discharge its obligation by paying you until, but not after, it receives a notification signed by the assignor or the assignee stating that the amount due has been assigned and that payment is to be made to the assignee. That notification is how a funder converts a paper position into an interception of your customer payments, and the day it goes out to your three largest customers is the day the negotiation changes character.

The termination side has a deadline and a price attached. Ind. Code §26-1-9.1-513(c) requires that within twenty days after a secured party receives a signed demand from the debtor, the secured party cause the secured party of record to send the debtor a termination statement or file it in the filing office, in the circumstances the subsection lists. Ind. Code §26-1-9.1-625(e) sets statutory damages of five hundred dollars in each case against a person who, among other failures, fails to cause the secured party of record to file or send a termination statement as required by Ind. Code §26-1-9.1-513(a) or §26-1-9.1-513(c). Five hundred dollars is not a settlement driver on its own, and it is not meant to be. It is a lever that costs nothing to pull and creates a written record of a funder ignoring a statutory duty, which is exactly the sort of record that changes how the next call goes.

The sequence that works in Indiana files is unglamorous and it is the same every time. Pull a current UCC search from the Indiana Secretary of State before you speak to anyone, put the financing statements in filing order, match each one to an advance agreement, and identify which positions were funded after a lien already covered the same collateral. Send signed termination demands on every position you have already paid off, dated, so the twenty day clock starts and is documented. Reconstruct the reconciliation history for each open position from bank statements rather than from memory. An owner who calls a funder with that package is negotiating from a file, and a receivables desk prices a file very differently from a phone call.

Where Federal Law Overrides Everything Above

Three federal rules sit above every Indiana rule on this page. The automatic stay under 11 U.S.C. §362(a) stops a proceeding supplemental, a garnishment, and a levy the moment a petition is filed, which is the only mechanism in American law that halts an Indiana collection in a single afternoon. Subchapter V of chapter 11 is the reorganization path most operating businesses in this position would use, and eligibility turns on the debt limit in 11 U.S.C. §101(51D), which stands at $3,424,000 in aggregate noncontingent liquidated debts for cases filed on or after April 1, 2025. That number is adjusted on a three year cycle, so confirm it against the current figure before anyone builds a plan around it.

The third rule is a correction rather than a tool. The Fair Debt Collection Practices Act does not apply to your advance, because 15 U.S.C. §1692a(3) and §1692a(5) define consumer and debt in terms of obligations incurred for personal, family, or household purposes. A collector working a business advance is not bound by the FDCPA’s call time restrictions, its validation notice, or its prohibitions on third party contact, and Indiana has no state analogue that fills the space for commercial obligations. That is worth knowing before you spend a week documenting conduct under a statute that does not reach the caller.

One firm named on this page is not a law firm at all. Delancey Street is a business debt settlement company that works the entire lifecycle of a file, from the UCC review and the reconciliation reconstruction through negotiated settlements, with attorneys in the Delancey Street network handling litigation and court filings where a file needs them. The other two companies listed cover broader consumer and business debt categories. Choose based on what your file actually needs, and understand that no settlement company and no lawyer can promise a particular number, because the outcome depends on the documents, the funder, and the posture of the case.

Who Should You Call? Our Top-Rated Business Debt Firms

One firm on this list works the entire lifecycle of a business debt file, from stopping the daily debits through attorney-led negotiation, UCC lien removal, and a signed release. The other two cover broader debt categories that often sit alongside the advances. Choose accordingly.