Legislation concerning debt collectors is gaining traction in Indiana. House Bill 1358 would allow the state to reduce or take a person’s state tax return to settle a garnishment.

The Indiana House has approved the bill and this week it was presented to the state’s Senate Civil Laws committee.

Rep. Casey Cox, R-Fort Wayne, who authored the bill, said the measure makes it easier for debt collectors to gain access to an individual’s funds. It also is designed to help the Department of Revenue by increasing revenue and offsetting costs.

The process for collectors reducing or taking a tax return would be the same as for any other debt collection process. Debtors also would be notified before anything was taken.

Brian Burdick, a partner with Barnes & Thornburg LLP, said the bill makes it easier for debt collectors to keep accounts moving in the right direction. Burdick works in the national law firm's Indianapolis office.

Burdick told Indiana Public Media, "They could do that today, go after your bank accounts, your real property up to a level, I mean it’s all out there. Let’s not forget this is a judgment debtor, somebody that owes something here, but it’s in a creditors interest to make sure they can continue to make progress.”

Left unsettled and likely up for debate in the bill are provisions referring to non-obligated spouses - or spouses who file jointly but aren’t responsible for the debt.  

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