The best business debt settlement companies in Indianapolis know that business cash advance funders must sue you, usually in New York, and then file their New York judgment in Marion County to reach your bank account. Indiana voids pre-suit confessions of judgment.
Why can't an MCA funder simply confess judgment against an Indianapolis business?
Indiana makes it unlawful to procure a warrant of attorney to confess judgment on a written contract to pay money before a cause of action has accrued. IC 34-54-3-2. Under IC 34-54-3-3, any such power given in advance is void, and Indiana courts shall not enforce another state's judgment obtained by virtue of such a void warrant. IC 34-54-3-4. For more, see our business debt settlement companies in Indiana page and our article on whether an out-of-state MCA funder can use a confession of judgment against you.
As of August 30, 2019, a confession of judgment affidavit can only be filed in the county of New York State where you reside, CPLR 3218(b), and a business resides in the county where it has a place of business. Without a New York place of business, a merchant cash advance funder must file a lawsuit against you, often in New York, perhaps utilizing a CPLR 3213 Motion for Summary Judgment in Lieu of Complaint if the contract has a forum selection clause. See our business debt settlement companies in New York City page.
What happens when a New York judgment is filed in Marion County?
A duly authenticated judgment of another state may be filed with the clerk of any court of record in any Indiana county and is treated like an Indiana judgment, open to the same defenses and procedures for reopening, vacating, or staying it. IC 34-54-11-1. The funder also files an affidavit with the clerk stating your address, and an execution may not issue earlier than twenty-one (21) days after entry of the judgment in the foreign jurisdiction. IC 34-54-11-2.
Those 21 days run from entry in New York and may be over by the time you become aware of the judgment. If an appeal is pending in New York or a stay has been granted there, and you have posted any security that court required, a Marion County court shall stay enforcement. IC 34-54-11-4. Otherwise, you may want to file a Trial Rule 60(B) motion in the Marion County court, within a reasonable time, to set aside the judgment as void, which means the New York court did not have personal jurisdiction over you.
How does a judgment reach your Indianapolis bank account?
Funders garnish Marion County bank accounts through proceedings supplemental. Trial Rule 69(E) allows the funder to file a verified motion stating that it owns the judgment and has no reason to believe a levy on execution will satisfy it. It can name your bank as a garnishee, and your appearance date must be at least 20 days after service. The court can order the bank to hold your deposit account, whether it is in your name or jointly with another individual. IC 34-55-8-7. If you request a hearing to claim exemptions and have the hold removed, the court must hold it within five days, not including weekends and legal holidays.
What if the funder sues you in Marion County Superior Court instead?
Effective June 1, 2019 and updated October 1, 2024, the Indiana Commercial Court Rules can apply to a Marion County Superior Court suit over a merchant cash advance agreement and your personal guaranty. Any party can move the case to the commercial docket unless another party files a refusal notice within 30 days after service or appearance, whichever is later. Filing the notice or failing to refuse waives your right to change judges under Commercial Court Rule 4. A funder can instead file in a Marion County small claims court if the claim is $10,000 or less. IC 33-34-3-2.
How should you choose among business debt settlement companies in Indianapolis?
Most web pages that rank national companies are based on internet review scores and Better Business Bureau grades.
Indianapolis enforcement checkpoints and what a provider should handle
| Stage in Collection Process | Clock | What the company should do for you |
|---|
| Default Pre-Litigation | None yet | Negotiate with the funder to avoid litigation |
| Judgment Obtained in New York | 21 days to execution | Monitor the New York docket and seek an appeal or stay of judgment |
| Judgment Filed with Clerk in Marion County | Same 21 days, already running | Hire counsel in Indiana to seek a stay of judgment or use Trial Rule 60(B) |
| Motion for Proceedings Supplemental Filed | At least 20 days to appear | Prepare exemption affidavit and offer to settle the debt |
| Bank Account Hold Placed | Hearing within 5 business days of request | Request the hearing immediately |
| Suit Filed in Marion Superior Court | 30 days to refuse commercial docket | Make a deliberate docket choice with counsel |
If you cannot get a good answer for checkpoints below the first two, or the company cannot bring in counsel in Indiana to appear on your behalf in Marion County, you should not hire it. There is no state license a company must obtain to practice business debt settlement in Indiana, because the Indiana Debt Management Company Law, IC 28-1-29-1, only applies to personal and household debts and excludes debt settlement providers. For pricing, see how much business debt settlement costs.
Frequently Asked Questions About Business Debt Settlement in Indianapolis
If Indiana bans confessions of judgment, can an MCA funder still freeze my Indianapolis bank account?
The funder must first sue your business and obtain a judgment, and if the judgment was obtained outside of Indiana, file it in the county clerk's office in Marion County. After that, it can request a court order in proceedings supplemental to hold your deposit account.
Can a New York funder file a confession of judgment against my Indianapolis business?
CPLR 3218(b) only permits filing a confession of judgment in the county where you reside. If you have no place of business in New York, it cannot be filed there. If you have an office, store or warehouse in New York, the funder can file in that county.
Can a funder place a hold on a joint account that my wife or husband has?
Yes. IC 34-55-8-7 permits the court in proceedings supplemental to hold any deposit account in which the judgment debtor has an interest, alone or with another. Request an exemption hearing as soon as possible.
Are there licensed Indiana Business Debt Settlement Companies?
Not at this time. The Indiana Debt Management Company Law only applies to personal, family, or household debts and excludes debt settlement service providers. The FTC's ban on advance fees for debt relief covers consumer debt, not business debt.