Indiana Debt Relief

In a Nutshell

Anyone in the state of Indiana can pursue debt relief solutions when the amount becomes overwhelming. Indiana residents have various options when it comes to finding debt relief, including debt settlement, debt consolidation loans, or working with a credit counselor.

Debt relief companies like TurboDebt and nonprofit organizations are ready to help Hoosiers from South Bend to Indianapolis and Evansville to Fort Wayne make a fresh start with their finances.

This guide will explore Indiana debt relief options to help you manage your credit and start you on the path to living debt-free.

How Does Debt Relief Work in The Hoosier State?

Whether your credit score is low, debt collectors keep calling, or late fees keep piling up, it’s likely time to seek debt relief.

During the debt relief process, you'll work with professionals to get more ideas about handling your finances and interpreting your credit report. You'll also get help making a plan to pay off any outstanding medical bills, personal loans, and credit card debt. Together, you'll devise a debt management and payment plan that meets your needs.

Consider starting an initial consultation with TurboDebt to discover debt relief solutions for Indiana residents. You'll begin by answering a few questions about your financial situation, then come up with affordable monthly payments to erase your debt.

Fair Debt Collection Practices

“For those struggling with debt in collections, the good news is that debt collectors nationwide must follow the Fair Debt Collection Practices Act,” explains Brad Reichert, founder and managing director of Reichert Asset Management LLC. 

“This federal law governing debt collection practices was created to ensure that debt collectors cannot cross certain ethical or legal boundaries when pursuing the recovery of a payment that’s past due or an asset that was acquired illegally,” Reichert adds.

Indiana Debt and Finance Statistics

The Hoosier state’s unemployment rate continued to hover below the national average at 3% as of April 2023.

While this figure is very encouraging, the effects of the COVID-19 pandemic and inflation are still leaving many Indiana residents with monthly payments on unsecured debt that they simply can't afford. Below, we've prepared an overview of the debt statistics many Hoosiers face.

Average Consumer Debt

The national average consumer debt per household was $101,915 in 2022. However, with a nearly 6% rise in debt from 2021 to 2022, this number is likely to continue increasing, making it harder for residents to pay off outstanding balances.

Average consumer debt is calculated by combining debt totals from credit cards, auto loans, mortgages, and student loans. Read below for more details specific to the state of Indiana:

Credit Card Debt

Indiana's average amount owed on credit cards was $4,847 in 2022. This is below the rest of the country, which averages upwards of $5,589 in credit card debt per household.

Auto Loan Debt

Indiana residents love their cars, SUVs, and trucks, and drivers in the state carried an average of $19,769 in auto debt in 2021. This was a 6.5% increase from the previous year.

Mortgage Debt

Currently, Indiana residents enjoy a healthy real estate market. They also manage their mortgage debt well, carrying one of the country's lowest average mortgage balances at $150,555 per household–well under the current national average of $231,464.

Student Loan Debt

Indiana college grads, on average, owe $33,162 in federal student loans. This is slightly below that of other college graduates nationwide, who owe $35,287 on average.

Bankruptcy

Indiana sees fewer bankruptcies among its residents than even five years ago. Unfortunately, 13,076 Hoosier State residents still filed for bankruptcy in 2022.

Average Income and Employment

Hoosiers’ median household income sits at $61,944, just under the average of $69,021 elsewhere in the country.

Credit Scores

The Hoosier State’s average credit scores are on an upward trajectory and averaged 712 in 2022. This figure sits just a couple of points below the national average FICO score of 714.

Identity Theft

The identities of Indiana residents are safer than residents in many other states. With 12,422 cases of identity theft reported in 2022, this puts Indiana 27th on the list in the U.S. for the number of cases recorded.

Banking and Tax Info

Indiana residents enjoy a relatively low state income tax rate of 3.23%. This is a flat rate, so all Hoosiers pay the same percentage rate of income tax on every dollar of their income each year. Governor Holcomb recently proposed an even lower flat income tax rate of 2.9%, making it almost the lowest state tax rate in the United States.  This is primarily due to Indiana’s current financial position and budget surpluses.

Indiana’s sales tax rate has been set at 7.00% since 2008. But this doesn’t cover all items for purchase. For example, the gasoline tax rate sits at $.33 cents per gallon. Also, Hoosiers who like to light up will have to pay up, with a tobacco tax of $1.24 per pack of 20 cigarettes.

Indiana has a high number of residents who are considered unbanked, with at least 5.6% using alternative sources, such as payday loans, paycheck cashing services, and money/wire transfer services businesses like WesternUnion, to control their funds instead of banks or credit unions.

TurboDebt Helps Indiana Residents Escape Their Debts

Indiana residents enrolled a total debt amount of $30,065,903 with us in 2023, with an average debt of $20,635 per client.

Does that amount of debt sound close to your own financial situation? At TurboDebt, we helped 4,715 Indiana residents with their debt, with over 1,457 enrolling in our debt relief program, saving 55.18% on their repayments before fees.

Top Types of Debt to Get Relief from in Indiana

Credit Card Debt

Credit Card Debt is one of the top types of debt that we see people struggle with, but we know that there are relief options, including our services at TurboDebt.

Some residents struggle with making on-time payments, getting into a cycle of late fees and high interest rates that add more to their payback amount each month. Even paying the minimum balance can drag you deeper into debt as you delay making larger payments and end up extending your payoff date.

At TurboDebt, we can negotiate with creditors to help alleviate as much as 50% of your total debt before fees.

Divorce Debt

On top of getting the right legal advice and dealing with the emotional trauma of a divorce, debts incurred during a divorce can quickly compound. In fact, the average Indiana resident spends about $9,000 for a divorce.

TurboDebt can help you take control of your divorce debt through a relief program tailored to meet your financial needs after a split with your spouse.

Business Debt

It's estimated that only 30% of a business’s capital should be tied up in debt to avoid the long-term financial burdens that often weigh on a business’ ongoing profitability. Too much debt will lower your business’s credit score, making you a liability in the eyes of your lenders.

Debt relief programs like those offered by TurboDebt can help Indiana business owners eliminate debt and focus on growing their capital.

Medical Debt

Despite recent federal-level changes as to how medical debt is reported to credit bureaus, it is still one of Americans' most financially crippling expenses. The Consumer Federal Protection Bureau estimates that 20% of households across the U.S. carry ongoing medical debts, with outstanding balances across all 50 states totaling approximately $88 billion.

Getting out of medical debt in Indiana may seem difficult, especially with normal living expenses in today’s economy. Let TurboDebt provide you with reasonable options to manage your outstanding medical bills.

Homeowner Debt

The American Dream of owning a home means that for many Americans, a mortgage is their most significant source of debt. The average mortgage debt for Hoosiers was $150,555 in 2022.

At TurboDebt, we connect Indiana residents with debt relief programs customized to fit their unique financial situation, including those impacted by mortgage debt and costs related to extensive home repairs plus unexpected replacement and maintenance costs.

Retirement Debt

Unfortunately for many Americans, unsecured debt is still an issue for their financial health, even in retirement. Some 30% of retired Americans said they have little to no retirement savings in their bank accounts.

Even on a fixed income, retired Hoosiers have options. TurboDebt is here to help retirees get debt relief help, so they can truly enjoy their golden years.

Options for Debt Relief in Indiana

Debt Management Programs

Debt management programs provide Hoosiers with an effective debt relief option that rolls all their debts into one manageable monthly payment, typically at a much lower interest rate overall. When combined with a steady income, many Indiana residents clear their debt in under five years. This type of payment plan works within the constraints of your income and other financial obligations to help you manage your money better overall.

Debt Consolidation Loans

A single, low-interest debt consolidation loan with a financial institution or online lender may help you eliminate numerous high-interest credit card debts. To explore this option, you'll need a good credit score (typically upwards of 680 or higher) to qualify for loans at a lower interest rate.

With this option, you take out a loan large enough to pay off most, if not all, of your smaller outstanding balances in a lump sum. After that, you're left making a single payment to the loan institution instead of paying off multiple accounts with varying interest rates.  In effect, you’re “refinancing” your high-rate balances into one large, lower-rate balance.

It’s important to recognize that this type of loan will not wipe out the debt, as it only consolidates the loan into a single loan and a single loan payment. It's also important to note that if you don't have good credit, you could pay the same, or even a higher, APR (interest rate) on a personal consolidation loan as the average interest rate on your current debts.

Debt Settlement

Indiana residents with significant debt issues can also pursue debt settlement as a form of debt relief. To start the process, seek help from a highly-rated, reputable debt settlement company that can help you make a plan to pay off your outstanding balances and negotiate with creditors to settle your balances for less than what you currently owe. 

In a program like this, the debtor agrees to pay their creditors a portion of what they owe (often as low as 50% of the current debt) instead of the whole amount. Once you enroll in a debt settlement program, you'll make monthly deposits to a savings account with the debt relief organization while you discontinue making payments to your creditors in order to fund this savings account.  Then, when the balance in the savings account is large enough, the debt settlement company submits your lump-sum payments to each creditor to satisfy the negotiated payoff amount.

One drawback to this option is that it can negatively impact an otherwise ”fair” to “good” credit score. Because the settlement can take time to negotiate, your payments will be considered late as you stop paying on each account until you reach a debt settlement and accumulate enough in your savings account to pay off your debts.

However, despite these drawbacks, debt settlement programs can be a great option for Indiana residents experiencing the stress of overwhelming debt or collection agencies. It also offers an effective alternative to declaring Chapter 7 or 13 bankruptcy.

Credit Counseling

Credit counseling offers an advisory approach to fixing your financial situation. Throughout the process, you'll work with a counselor assigned by the credit counseling agency.

These programs, offered through private organizations and nonprofit or government institutions, also give you insight into managing your money to help you avoid accumulating future debt. They often help you create a debt management plan that you can use to approach creditors or other debt collectors. Enrolling in a credit counseling program doesn't involve paying your outstanding bills for you, but it gives you the tools to do so consistently each month.

Bankruptcy

While declaring bankruptcy is often referred to as a “clean financial slate,” the reality is much starker than that. Filing for Chapter 13 or Chapter 7 bankruptcy may allow Indiana residents to eliminate their debts, but it's typically viewed as a final option if you have no other foreseeable way to pay back what you owe.

Bankruptcy involves using legal professionals and the U.S. Bankruptcy Court system to determine how much you can afford to pay back to creditors based on your income, your current assets, and your debt-to-income ratio. Some of your assets may get sold off to cover your debts, or a judge may order you to pay back a specific amount each month. In some cases, your debts may be waived if the court decides you have no realistic way of paying them off.

As you might expect, declaring bankruptcy causes long-term damage to your credit scores, and the many negative after-effects of bankruptcy can remain on all three of your credit reports for up to 10 years. While you’ll dodge debt collectors and other lenders, it can take years to qualify for a loan again if you want to purchase a car or home or even lease an apartment.

Debt Forgiveness

Debt forgiveness may occur when a lender ‘forgives’ or cancels out all or a portion of a borrower’s balance. A borrower must typically meet certain strict requirements for a lender to erase a debt or even a small portion. 

Government agencies typically offer debt forgiveness, as private organizations rarely provide this option. Requirements are often based on your income or profession. For example, public school teachers may qualify for student loan forgiveness based on the number of years spent teaching, the type of educational institution, or the geographical location where they teach.

Debt and Financial Hardship Resources

Temporary Assistance Programs

Family and Social Services Administration: This service helps Indiana residents who are elderly or in low-income situations with families. These services also assist individuals who are experiencing food insecurity, have significant childcare needs, and are looking for employment assistance.

State Health and Human Services

Hoosier Rx: This program offers financial assistance to senior residents struggling to pay for prescription medications as part of their Medicare Part D premium. It also helps people on the Medicare Advantage plan cover the costs of their prescription drug program.

Child Care

Temporary Assistance for Needy Families: The Temporary Assistance for Needy Families program (TANF) provides grant money to Hoosier families needing temporary financial assistance and other support services, including child care.

Shelters for the Homeless

Housing, Eviction, and Homeless Prevention: The Indiana Housing and Community Development Agency helps low to moderate-income families find sustainable housing options, so they won’t be without a place to stay or live.

Free Transportation Services

CIRTA: The Central Indiana Regional Transportation Authority (CIRTA) is a regional government organization that helps improve transportation options for Central Indiana residents, often with free options.

Finding Debt Relief in Indiana

You have lots of options to choose from when it comes to pursuing debt relief in Indiana.

While there are plenty of options aimed at helping people break the shackles of debt and bankruptcy filings, it’s important to do your due diligence and find an accredited debt relief company with transparent reviews from actual clients.

Get reliable and tested help from teams like the professionals at TurboDebt. We’re here to help you find the right debt solution for your unique situation and get you back on the path to building wealth and living debt-free.