Ready to say goodbye to student loan debt for good? Learn More

How to Settle Your Debts in Indiana

Upsolve is a nonprofit that helps you get out of debt with education and free debt relief tools, like our bankruptcy filing tool. Think TurboTax for bankruptcy. Get free education, customer support, and community. Featured in Forbes 4x and funded by institutions like Harvard University so we'll never ask you for a credit card.  Explore our free tool

In a Nutshell

Debt settlement is just one type of debt relief option available to you at this time. This guide will help you determine whether debt settlement, or a debt management alternative, is the best “fit” for your unique circumstances.

Written by Upsolve Team
Updated March 26, 2021

If you are struggling with past-due balances on debt-related accounts, you are probably anxious about the fees and penalties that will continue to accrue as long as your account remains delinquent. You may also be anxious about your financial situation generally. Know that there are options available that can help you to manage your debt effectively. One popular debt relief option that is generally used for past due balances on unsecured debt accounts is called debt settlement. Debt settlement involves paying less than the full amount of debt owed to your creditors in exchange for partial forgiveness of your balance and the closure of your account. Creditors are often willing to settle because this process allows them to receive some money instead of none. Statistically, only a fraction of accounts that are three or more months (90 days) behind will be paid in full. Settling debts for less than the outstanding balance is better for creditors than collecting nothing at all. Debt settlement also saves your creditors from paying debt collectors a fee to handle collecting your unpaid debt. 

Is debt settlement a good option for you? There are several factors to consider when answering this question. If your credit score is low or you are paying late fees, then debt settlement may be a good option. Debts that may be eligible for settlement include most unsecured debts, including bank-issued or store credit cards, medical bills, gas cards, signature loans and even collection agency accounts. Loans for cars and furniture are secured debts. If you stop paying on these loans, the creditor can take your collateral back, so these creditors are generally unwilling to settle. 

Note that you can generally only settle debts once accounts are delinquent. You must also act quickly, because you won’t be eligible to settle your debts unless you can offer a lump sum immediately or 2-3 installment payments over as many months. If you’re already struggling with debt, you may not have access to these resources. In that case, you may want to review the debt management alternatives listed at the bottom of this guide.   

Learn More Through Free Nonprofit Credit Counseling

There is a lot to think about when you’re working towards becoming debt-free. The good news is that there is free help available for Indiana consumers who want to learn more about their debt management options. This help exists in the form of a no-cost credit counseling session provided by a nonprofit credit counseling agency. You can talk to a licensed credit counselor without risking any obligation to take the advice you receive. The choice to take the counselor’s advice or to ignore it is always yours. When selecting an agency to work with, you’ll want to ensure that it is a member of the National Foundation for Credit Counselors (NFCC) because these accredited agencies are held to the highest standards. 

What can you expect from a free credit counseling session? You will be speaking with someone trained in money management and personal finance. The session will likely last around an hour in length. It is important to be open about your circumstances so they can help you come up with a solid financial plan of action. Everything you share will be confidential. Your counselor will do a thorough analysis of your debts, expenses, and income. You and your counselor will then determine some short and long-range financial goals and you’ll learn what steps you should consider taking in order to meet these goals.

How to Settle Your Debts in Indiana

Debt settlement is just one type of debt relief option available to you at this time. This guide will help you determine whether debt settlement, or a debt management alternative, is the best “fit” for your unique circumstances. 

Collect the Details About Your Debts 

To become debt-free, you must first gather as much information as you can about all of your debts. A great place to start involves pulling a free copy of your credit report from each of the credit bureaus (e.g. Experian, Equifax, and TransUnion). Your credit report will provide you with a list of creditors, payment history and any closed accounts. You’ll also want to review your most recent account statements to confirm the interest rates you are currently paying (in addition to your monthly payments and balances owed). You need to examine all of this information for two primary reasons. First, you’ll need to decide if any of your debts is a good candidate for settlement. Second, you’ll want to provide your credit counselor with a complete financial picture of your current circumstances. Your credit counselor can’t provide you with accurate and effective personalized guidance unless they understand your financial situation in full. 

Collect Details About Your Ability to Settle Your Debts

Keeping track of your income and living expenses in a budget each month is very important. You can’t know if you can afford to fund debt settlements if you don’t know (in detail) how much you earn, how much you spend, and how much you owe. You can likely determine your monthly income by looking at your two most recent paycheck stubs. You’ll then want to account for all of your monthly expenses. Include both fixed expenses (like your mortgage or rent) that stay the same every month and unfixed expenses (like groceries and gas) that don’t. If there is little or no money left over to pay creditors after you’ve paid your expenses, debt settlement is probably not your best option. The exception to this “rule” involves debt settlements funded by one-time influxes of cash from the sale of property, inheritances, bonuses, etc. If you can fund a lump sum settlement immediately and you don’t have to rely on several monthly payments, debt settlement may still be a reasonable option for you. 

Learn About the Costs to Settle Your Debts in Indiana

If you are thinking about working with a debt settlement company, know that their services are not free. Do your homework to learn about what an Indiana debt settlement company can legally charge for their debt negotiation services. You’ll pay for their service of negotiating and working out a payment plan for you to pay less than the full amount you owe. You’ll also pay for them to negotiate with your creditors to eliminate any late fees or other charges you incur when you stop paying on your accounts. Sometimes, a company may charge an initial set up fee, which many states have capped at $50. Many companies charge a maintenance fee for each debt you hope to settle. An Indiana debt settlement company may also charge around 15% of the amount of the total debt you originally owed or 15% of the total amount you saved by entering a settlement agreement. These fees can add up quickly, so make sure to ask any questions you may have about a company’s fee structure before you agree to work with them. 

Decide Whether to Work with an Indiana Debt Settlement Company

If paying fees for the debt settlement process has you thinking of settling your debts by yourself, there are some things to consider. One is the amount of time and effort it will take on your part to contact all your creditors to negotiate a settlement with each of them. Another factor to consider is your lack of knowledge and experience, even if you have good computer skills and don’t mind negotiating with your creditors directly. You will be at a disadvantage compared to an Indiana debt settlement company that has knowledge and experience in what terms creditors typically accept or don’t accept when settling debts. Also, you won’t have anyone to talk to if you run into issues going it alone. With that said, avoiding fees is a powerful motivator to put your best foot forward. There is no one “right” approach to debt settlement. Do whatever makes the most sense for your unique situation. 

Research Indiana Debt Settlement Companies

You’ll want to do what you can to avoid scams when you seek help from an Indiana debt settlement company. If a company makes guarantees, that’s a red flag. If they tell you to stop talking to your creditors without explaining the risks of this approach, be concerned. Another red flag to look for is a phrase like “new government programs” as there usually aren’t any when it comes to debt settlement.  

Once you find a few companies you’re interested in working with, look them up to see if other consumers have filed any complaints against them. You can do this by checking with the Better Business Bureau or the Indiana consumer protection division in the attorney general’s office for company complaint history. A trustworthy company will explain any conditions on its services upfront. Also, a reputable company will not charge you service fees before they settle your debts. Keeping you informed about your debt settlement process on an ongoing basis is also how a trustworthy company operates.  

How to Make Your Debt Settlement Work

The goal of any debt settlement agreement is to make your payments successfully so that you don’t default on your plan and end up in a worse financial position than the one you started in. If you’re not in a position to make a lump sum offer immediately (because you have access to enough income or property you can sell to fund your offer), you’ll likely need to work with a debt settlement company to build your escrow account over 2-3 months until you can fund an acceptable offer. Think about when to schedule your monthly payments and how to plan for emergencies so you don’t miss a payment. Avoid having your debt settlement payments debit on the first of the month when your payments for rent or mortgage are also due. 

Be mindful of planning for emergencies like car repairs, as you don’t want an unexpected expense to derail your plan. Perhaps you have a savings account for taking care of emergencies. If not, you might do this by keeping one or more credit cards out of your debt settlement. If you have to use a credit card, it will be helpful to set up a payment plan to wipe out this new debt for the emergency as soon as possible. Trying to use a credit card while going through a debt settlement can be tricky. A bank where you have more than one credit card may actually close the card with the lower balance that you are trying to keep. A creditor might reduce the credit limit on the cards. Discuss all of this if you are working with an Indiana debt settlement company so you have a plan for dealing with any emergencies that may arise during your debt settlement.   

Alternatives to Debt Settlement

If your debt settlement process is unsuccessful because your creditors won’t settle or you default on your payments, you can get sued in court and your creditors may be ultimately allowed to garnish your wages. If you’re unwilling to take this risk or you simply don’t have enough income to fund settlement offers quickly, you may want to consider some debt management and debt relief alternatives. If any of the alternative options listed below are intriguing to you, make sure to discuss them with your credit counselor.

Upsolve Member Experiences

1,572+ Members Online
EJ Joier
EJ Joier
★★★★★ 9 hours ago
Lawyers quoted thousands of dollars for this service. The website makes everything clear and simple. once finished, the paperwork was perfectly laid out and accepted without any? s or corrections.
Read more Google reviews ⇾
Jamie Grisaffi
Jamie Grisaffi
★★★★★ 4 days ago
Upsolve was so easy to navigate and explained everything! They don't rush through things and they make sure you understand the process.
Read more Google reviews ⇾
Matthew Suarez
Matthew Suarez
★★★★★ 6 days ago
Awesome tool. Very thankful for Upsolve. I highly recommend using their services.
Read more Google reviews ⇾

Indiana Debt Consolidation

If you have a very good credit score, you may want to consider securing a debt consolidation loan. A favorable credit score can help Indiana consumers secure a debt consolidation loan with good interest rates and favorable terms. Debt consolidation enables you to pay all your debts in one lump sum payment each month while (ideally) saving money on interest. Essentially, you’ll use your new line of credit to pay off your current high-interest unsecured debts while streamlining your debt into a single account. With Indiana debt consolidation, all your debts are paid in full, unlike debt settlement where you pay less than what you owe. As a result, this option will damage your credit score far less than debt settlement will. However, if you don’t have very good credit, this option may not work for you.  

Indiana Debt Management Plan

If your credit score isn’t stellar, you may want to consider a debt management plan or DMP as an alternative to debt settlement. A debt management plan is similar to securing a debt consolidation in that all your debts are paid in full at the end of the process, repayment of your debts is streamlined into a single account and you’ll ideally save money on interest. However, unlike securing a debt consolidation loan, an Indiana DMP doesn’t require you to obtain a new line of credit. Instead when you enter into a DMP, you make one monthly payment to a credit counseling agency. They, in turn, pay your creditors using your funds. Many consumers benefit from lower payment amounts under a DMP than they are paying when juggling multiple accounts. 

Indiana Bankruptcy

Perhaps you don’t have good or excellent credit and you therefore can’t secure a debt consolidation loan. Maybe you have little or no money left over after paying your monthly expenses and can’t successfully complete a debt settlement or debt management plan. If this is your financial situation, you may significantly benefit from filing for Indiana Chapter 7 bankruptcy. This option will temporarily lower your credit score but will also allow you a fresh financial start. A bankruptcy lawyer in your area can help you understand what filing for Indiana bankruptcy entails (and whether it may be a good option for your situation) during a free consultation. If you find you can’t afford a lawyer, but still want to file for Chapter 7 bankruptcy, Upsolve may be able to help you file for free.

It's easy to get debt help

Choose one of the options below to get assistance with your debt:

Considering Bankruptcy?

Our free tool has helped 13,813+ families file bankruptcy on their own. We're funded by Harvard University and will never ask you for a credit card or payment.

Explore Free Tool
13,813 families have filed with Upsolve! ☆

Private Attorney

Get a free evaluation from an independent law firm.

Find Attorney

Upsolve is a 501(c)(3) nonprofit that started in 2016. Our mission is to help low-income families resolve their debt and fix their credit using free software tools. Our team includes debt experts and engineers who care deeply about making the financial system accessible to everyone. We have world-class funders that include the U.S. government, former Google CEO Eric Schmidt, and leading foundations.

To learn more, read why we started Upsolve in 2016, our reviews from past users, and our press coverage from places like the New York Times and Wall Street Journal.