A new report shows about 75 percent of Hoosiers had some form of debt in 2017 and one in three borrowers had debt in collection.
The Indiana Institute for Working Families policy brief shows that as the number of Hoosiers with debt rises, so does the number of complaints about debt collection.
The analysis shows Indiana residents complain most frequently about attempts to collect debts not owed. The majority of people report the debt is not theirs, while some say the debt was paid or the result of identity theft.
"This suggests there are problems with the way documentation is required," says Erin Macey, a policy analyst for the Institute.
She says many individuals don't receive a proper notice from the collector before it's too late.
"We're seeing from survey data that many individuals say that they never knew there was a judgement against them in court," Macey says.
If notice is not properly given out to borrowers, they may be charged for an amount they don't owe or additional fees.
People might ignore certain types of debt such as gym memberships and medical bills, but Macey says they can also go to collections.
The report also indicates that Indiana is lacking additional protections for borrowers compared to other states.
When one has debt in collection, it is important to know a federal law protects individuals from collectors and debt buyers.
Under the Fair Debt Collection Practices Act (FDCPA),
Collector can only contact a consumer at certain times and places, for example, collectors can't call after 9 p.m;
Consumers can request that a debt collector stop contacting them;
A debt collector must contact the attorney and not the consumer when knowing an attorney is representing the consumer;
One can request documentation and dispute debts.
The Consumer Financial Protection Bureau (CFPB) suggests consumers to keep good records of your communications with a debt collector. When unfairness happens, complain to CFPB or the Federal Trade Commission.
