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

The Indiana business owner behind on funding contracts negotiates inside a code that caps judgments, fences household assets, and criminalizes extreme rates, while the funder negotiates as if none of those chapters exist.

Seven Indiana authorities compose the position below, taken in file order.

Secured Transactions Under Indiana Article 9

Threshold proof belongs to the party claiming the lien. Under the Indiana secured transactions article, citable as Uniform Commercial Code Secured Transactions, attachment, perfection, priority, and enforcement of interests in personal property, fixtures, and receivables decide whether an MCA filing reflects a true perfected lien with account debtor enforcement rights or an unperfected position to be discounted in settlement talks.

You sign the contract and then you discover what the contract means. Counsel should review and analyze the filing against the agreement before any payment discussion, since the collector always describes the stronger of the two positions and sometimes describes one the records never created.

Deceptive Acts Under the Consumer Sales Statute

A supplier in Indiana may not commit unfair, abusive, or deceptive acts, omissions, or practices in connection with a consumer transaction, before, during, or after the transaction, and the statute enumerates deceptive representations of sponsorship, quality, quantity, price advantage, and warranty rights, whether oral, written, or electronic.

Where a funding or collection counterparty deceived a small business principal who also qualifies as a consumer party, this section supplies a counterclaim and a treble damage backdrop for negotiation. But the consumer nexus must be real rather than wished into the file, and counsel tests it against the disbursement records before building the demand around it.

Who Counts as a Collection Agency

Indiana defines the regulated collector in expansive terms. The statute reaches persons soliciting claims for collection or collecting claims owed to another, by whatever channel, including letter or demand services sold for a fee or percentage and persons using fictitious names to imply third party collection.

The breadth is the instrument. Debtor counsel pulls most third party collectors into the licensing and conduct regime before discussing repayment, demanding credentials and authority at the threshold, and a servicer that answers with volume instead of paperwork has announced its weakness. That is the gate before any payment discussion.

Paper first.

Interest on Money Judgments

Judgment changes the arithmetic in the debtor favor. Judgments bear interest from verdict or finding until satisfaction at the contract rate, capped at eight percent even where the contract charged more before judgment, or at eight percent where no contract exists.

The cap lets a debtor quantify the true cost of letting a claim go to judgment versus settling. Collectors describe judgment as a cliff, yet the statute prices it as a slope, and an owner who can carry eight percent accrual while counterclaims mature negotiates from patience rather than panic.

Exemptions From Execution

Core household assets sit outside the collector reach. Property of an Indiana domiciled debtor exempt from execution includes up to fifteen thousand dollars in residence equity, individually available to joint entireties debtors, eight thousand dollars in other real or tangible personal property, three hundred dollars of intangibles such as deposit accounts and cash, prescribed health aids, entireties interests, and qualifying retirement interests.

These fences hold while business debt is restructured. We ensure the exemption schedule is mapped against the household inventory and ensure no stipulation, even casually offered on a recorded line, waives what the chapter protects.

Receivership Appointments

Both sides reach for custodial control through the same section. Courts may appoint a receiver in creditor actions to subject property to a claim, in disputes among joint owners, where property or rents face danger of loss or injury, in mortgage foreclosures under listed conditions for property that is not owner occupied, and where an entity is dissolved, insolvent, imminently insolvent, or has forfeited its rights.

Creditors threaten control while owners of distressed but viable firms seek a stabilizing appointment through the same courthouse door, and the provision (which the mortgage bar cites most often in foreclosure practice, though its creditor action and insolvency clauses matter more to an operating company with a hostile funder attempting to capture rents before the merits are ever heard) rewards the party that frames the enterprise as worth preserving rather than worth liquidating.

There is a particular stillness in a courtroom at four in the afternoon when a receiver motion is called and neither side knows whether the judge spent the morning with the papers, and in that stillness the better prepared memorandum decides the afternoon as a rule.

The Loansharking Ceiling

Indiana criminal law draws a line that commercial paperwork cannot cross by relabeling. Knowingly receiving or contracting to receive consideration for a loan at more than twice the rate specified in the consumer credit statute constitutes loansharking, a Level 6 felony, elevated where force or threats appear, and even in commercial deals a rate within reach of the criminal threshold hands the debtor extraordinary bargaining weight, including potential unenforceability arguments.

The loansharking provision reframes the entire file the week it enters the correspondence. A funder that priced an advance as a purchase must defend the arithmetic as a loan in order to deny the arithmetic matters. The rate was criminal. The contract called it a purchase. a posture no collection manager enjoys holding, and settlement figures move in response, though counsel should measure the threshold math twice before citing a felony in writing.

Delancey Street, a settlement company rather than a law firm, provides a confidential review of Indiana funding exposure while independent counsel resolves the legal questions, and an owner can open that review through Delancey Street.

The statutes apportion protection before any collector calls. An owner who proves the lien, prices the judgment, fences the household, and names the criminal ceiling answers demands from within the code rather than beneath it, and steps taken, or not taken, in the first weeks decide which of those two places the negotiation occupies.