The work is done. The invoice is sixty, ninety, maybe a hundred and twenty days past due. You’ve called, you’ve emailed, you’ve sent another statement. The customer either ghosts you or comes back with reasons. You’re now sitting on a $50,000 receivable that’s quietly turning into a problem, and the cost is not just the money. It’s the cash flow gap, the payroll you have to cover anyway, and the time you’re burning chasing someone who knew the bill was due. This post walks through what an Indiana business owner can actually do when a customer owes you $50,000 and won’t pay: how to firm up your file, the right way to demand payment, the deadlines you can’t miss, what a lawsuit can and cannot get you, and what comes after a judgment.
Start with the file, not the lawsuit
Before you talk to a lawyer, before you fire off an angry email, take thirty minutes and pull the file together. The strength of a $50,000 collection case is almost entirely about documentation, and Indiana courts and juries respond well to clean records.
You want the underlying agreement, whatever form it took: a signed contract, a master services agreement, a statement of work, a purchase order, an emailed quote the customer accepted, or a chain of texts that confirms the deal. You want every invoice you sent, with the date of issue and the date due. You want every statement of account or aging report you sent the customer. You want every email, text, and voicemail acknowledging the work, accepting delivery, requesting changes, or promising payment. A short email from the customer saying “we’ll get that paid by the 15th” is worth more in a collections case than ten phone calls you can’t prove happened.
You also want the proof that the work was done or the goods were delivered. Photographs, delivery receipts, signed change orders, time sheets, milestone sign-offs, project communications, customer praise. The two questions a judge wants answered quickly are: did this business actually do what it agreed to do, and did the customer accept the work without timely objection. If your file answers both, you are in much better shape than a customer who is now scrambling to manufacture a dispute.
If the customer never objected to your invoices when they were sent, you may have a particularly clean path under Indiana’s “account stated” doctrine, which we’ll get to in a moment.
Send a demand letter
In nonpayment cases more than most, a well-drafted demand letter does heavy lifting. It forces the customer to take the dispute seriously, creates a paper record that you tried to resolve things, often triggers a call to the customer’s insurance carrier or general counsel, and frequently produces partial payment or a settlement offer before you spend a dollar on litigation. Lenders, larger customers, and businesses with reputations to protect respond differently to a letter on law firm letterhead than they do to another emailed statement from accounting.
A good demand letter is short, specific, and unemotional. It identifies the contract or course of dealing, attaches or references the unpaid invoices, states the total balance and any interest that applies, sets a clear deadline to pay or respond, and explains what happens if the deadline passes. It does not threaten things you won’t do. It does not posture. It does not read like it was written at 11 p.m. by the owner.
A few practical points specific to Indiana. If your contract has a notice-and-cure provision or a dispute resolution clause requiring mediation or arbitration, you have to honor those steps before suing, or you risk losing the case on procedure. If your contract provides for attorney fees, the demand letter should say so; many customers who would otherwise stall will pay quickly once they realize they may end up owing your fees on top of the principal. And if any of the work falls under Indiana’s mechanics lien statute (construction, materials, improvement to real estate), there are separate notice and filing deadlines that you cannot afford to miss.
For more on the pre-litigation stage, our post on contract disputes between Indiana businesses walks through the steps in more detail.
Use Indiana’s “account stated” doctrine where you can
One of the most useful tools in an Indiana collections case is the doctrine of account stated. As the Indiana Court of Appeals has put it, an account stated is an agreement between the parties that all items of an account and balance are correct, together with a promise, expressed or implied, to pay the balance. The agreement may be inferred from the delivery of the statement and the recipient’s failure to object within a reasonable time. The practical value of the doctrine is significant: once you’ve shown the statement was delivered and went unobjected to, the amount shown is treated as prima facie evidence of what’s owed, shifting the burden to the customer to prove the amount is wrong.
A few important limits. Indiana law requires that both parties view the account as a final adjustment of the demands between them. An invoice submitted for some other purpose (for example, where each item is to be reviewed and adjudicated separately) cannot be converted into an account stated by silence. There also has to be a course of prior dealings between the parties, not a one-time statement sent to a stranger. But for the routine business-to-business relationship where you’ve been invoicing month after month and the customer has been paying or at least not disputing the invoices, account stated is often the cleanest legal theory for collection. It’s worth flagging this with a lawyer early; framing the case correctly from the start can save months of unnecessary discovery later.
Don’t sleep on the statute of limitations
Indiana imposes deadlines on collection actions, and missing them ends the case before it starts. Which deadline applies depends on the kind of agreement and what the debt is for.
For a sale of goods governed by Indiana’s UCC, the limitations period is four years from the date of breach under Indiana Code section 26-1-2-725. For a written contract for the payment of money (think promissory notes, bills of exchange, and similar instruments), Indiana Code section 34-11-2-9 sets a six-year period. For a written contract that is not solely for the payment of money (a written services agreement, master services agreement, or commercial contract with multiple obligations), Indiana Code section 34-11-2-11 sets a ten-year period. In a 2025 decision, the Indiana Court of Appeals applied the ten-year written contract statute to a claim against a business that agreed to perform a service in exchange for a fee, treating the substance of the agreement as a written services contract rather than a contract for the payment of money. For oral agreements, Indiana Code section 34-11-2-7 sets a six-year period for actions on accounts and contracts not in writing.
Indiana also follows the discovery rule, meaning a cause of action accrues when the claimant knows or, with ordinary diligence, should have known of the injury. For nonpayment, that’s usually the date the invoice came due and went unpaid, but partial payments, written acknowledgments of the debt, or a course of conduct where the customer keeps promising to pay can affect when the clock runs. Don’t try to time this yourself. If you’re getting anywhere near a deadline, talk to a lawyer.
Know what you can recover, including interest
Indiana law lets you recover what’s necessary to put your business in the position it would have been in if the customer had paid on time. In a collections case, that generally means the unpaid principal, any contractually agreed interest or late fees, prejudgment interest, court costs, and (if your contract or a specific statute provides for them) attorney fees. It does not generally mean punitive damages on a straight nonpayment claim, and it does not mean speculative losses you can’t document.
Prejudgment interest is worth flagging because it’s commonly misunderstood. If your contract sets an interest rate for unpaid balances, that rate generally controls. If your contract is silent, Indiana law provides default rates. Indiana Code section 24-4.6-1-103 allows interest at 8% per annum from the date an itemized bill has been rendered and payment demanded on an account stated, an account closed, or for money had and received and retained without consent. Indiana Code section 24-4.6-1-102 provides an 8% default rate on loans or forbearances of money when the parties have not agreed on a rate. The 6% to 10% prejudgment interest range you may have seen elsewhere comes from a different chapter (Indiana Code chapter 34-51-4) that applies only to actions arising out of tortious conduct, not breach of contract. Indiana appellate courts have also long held that prejudgment interest is appropriate in a contract action where the damages are complete and may be ascertained as of a particular time, without requiring the trier of fact to exercise discretion in assessing the amount, which is exactly the situation in most clean invoice cases. On a $50,000 invoice that sat unpaid for two years, 8% simple interest works out to roughly $8,000 in additional recovery, which is real money and which often surprises customers who didn’t realize they were accruing it the whole time.
If you have any pricing or invoicing changes you’ve been thinking about (clearer payment terms, defined late fees, a stated interest rate, an attorney fees clause), this is a good moment to make them on a going-forward basis. The contracts you sign next year are the ones that will determine how easy it is to collect the year after that. Our post on what kind of damages your business can recover in a breach of contract lawsuit goes deeper on the damages categories.
Where you sue, and the suit-versus-settle calculus
If the customer won’t pay and the demand letter hasn’t moved the needle, filing suit becomes a real option. Where you sue depends on the facts. For most Indiana business disputes, venue lies in the county where the contract was performed, where the customer resides or has its principal office, or where the relevant events occurred. For central Indiana businesses, that usually means Marion County, Hamilton County, Hendricks County, Boone County, Hancock County, or Johnson County, depending on the customer’s location and the contract. Many contracts include forum selection clauses that override the default rules, so read the fine print before you file.
On a $50,000 debt, small claims court is not the right venue; Indiana small claims jurisdiction caps at $10,000. A $50,000 case belongs in the plenary docket of an Indiana circuit or superior court. The good news is that the procedural rules in those courts allow for meaningful discovery (subpoenas for the customer’s bank records, depositions of the principals, document requests on related entities) which often produces information that prompts settlement well before trial.
A few realities worth being honest about. A $50,000 case can usually be resolved without trial, but it isn’t free to litigate; an experienced lawyer will tell you upfront roughly what the path looks like and what the realistic settlement range is. A customer who is broke or who has moved their assets is a different problem than a customer who has the money but doesn’t want to pay; the strategy and the likely return diverge sharply. And if the customer is itself an LLC or corporation with no assets, you may have to think early about whether there are individual guarantors, fraudulent transfers, or piercing the corporate veil arguments worth exploring. None of that should stop you from pursuing the claim, but it should shape how aggressively you spend on it.
At Fugate Gangstad Lowe, our attorneys each bring more than a decade of experience handling Indiana business and contract disputes, and our approach to a collections case is practical. We figure out the most efficient path to actually getting your money, whether that’s a sharp demand, a negotiated payment plan, a quick summary judgment motion, or a full litigation track when the facts call for it. We use modern technology and disciplined case management to avoid running up fees on motions and busywork that don’t move your case forward. If a verbal-only deal is part of the picture, our post on handshake deals and business contract disputes in Indiana is also worth a read, and for the underlying framework on these cases, see our post on understanding breach of contract in Indiana.
A judgment is not a payment
This is the part business owners often don’t hear until it’s too late. Winning a judgment is not the same as collecting the money. A judgment is a court order saying the customer owes you a fixed amount; it doesn’t deliver a check. If the customer pays voluntarily, great. If not, you move into post-judgment collection, which is its own phase with its own tools: garnishment of bank accounts, garnishment of wages (for individuals), proceedings supplemental to discovery the customer’s assets, judgment liens on real estate, and in some cases involuntary collection through the sheriff. Each of these tools has procedural requirements and exemptions, and how productive they are depends almost entirely on what the customer actually has.
A practical way to think about it: by the time you’re suing a customer for $50,000, you should already be asking your lawyer not just “can we win” but “if we win, can we collect.” That second question is sometimes the one that drives the strategy. A faster, smaller settlement that you can actually deposit is often better than a larger judgment against a debtor who has nothing to take.
Frequently asked questions about unpaid invoices in Indiana
What can I do if a customer won’t pay my invoice in Indiana?
Start by tightening the file (contract, invoices, proof of work, communications), then send a written demand identifying the unpaid balance and a deadline to pay. If that doesn’t resolve it, you can pursue a breach of contract or account stated claim in Indiana court for the principal, prejudgment interest, court costs, and (where allowed) attorney fees.
How long do I have to sue a customer for nonpayment in Indiana?
It depends on the agreement. For a sale of goods under Indiana’s UCC, the limitations period is four years from the date of breach under Indiana Code section 26-1-2-725. For a written services or commercial contract, Indiana courts have applied the ten-year period in Indiana Code section 34-11-2-11. Written contracts for the payment of money (promissory notes and similar instruments) fall under a six-year period in Indiana Code section 34-11-2-9. Oral contracts are six years under Indiana Code section 34-11-2-7.
Can I charge interest on a late invoice in Indiana?
If your contract sets an interest rate or late fee for unpaid balances, that rate generally controls. If your contract is silent, Indiana Code section 24-4.6-1-103 allows 8% per annum on an account stated from the date an itemized bill has been rendered and payment demanded. Indiana Code section 24-4.6-1-102 provides the same 8% default rate on loans or forbearances of money when the parties have not agreed on a rate. You generally have to bring a lawsuit (or settle while preserving the claim) to recover prejudgment interest.
Do I have to send a demand letter before suing for unpaid invoices?
Indiana law doesn’t require a demand letter in most breach of contract cases unless your contract or a specific statute requires one. As a practical matter, sending a clear written demand first is almost always the right move. It often produces payment and strengthens your case if it does go to court.
Can I sue a customer in Indiana if I only have a verbal agreement?
Usually, yes. Indiana enforces oral contracts in many situations, though some agreements (including contracts for the sale of goods of $500 or more under Indiana’s UCC statute of frauds at Indiana Code section 26-1-2-201) must be in writing to be enforceable. Verbal deals are harder to prove, and the statute of limitations is shorter, but they’re not automatically void.
What is an account stated and how does it help me collect?
An account stated is an agreement between parties (express or implied) that all items of an account and the balance are correct, with an express or implied promise to pay. Indiana courts will infer that agreement from delivery of a statement that the recipient does not object to within a reasonable time, provided both parties viewed the running account as a final accounting of the demands between them. The doctrine treats the balance as prima facie evidence of what’s owed, shifting the burden to the customer to prove the amount is wrong. For routine business-to-business invoicing, account stated is often the cleanest legal theory for collection.
What happens if I win a judgment and the customer still won’t pay?
A judgment is a court order, not a payment. If the customer doesn’t pay voluntarily, you can use post-judgment collection tools like garnishment, proceedings supplemental, judgment liens on real estate, and sheriff’s execution. How productive those tools are depends on what assets the customer actually has, which is why it’s worth thinking about collectability from the very beginning of the case.
Where do I file a lawsuit against a customer in central Indiana?
Venue depends on where the contract was performed, where the customer is located, and what your contract says. For central Indiana businesses, suits commonly go to Marion, Hamilton, Hendricks, Boone, Hancock, or Johnson County trial courts. Some contracts include forum selection clauses that control venue, so check the fine print.
When to call a lawyer about an unpaid customer invoice
If a customer owes your Indiana business $50,000 (or anywhere close), it’s worth a real conversation with a business litigation attorney before the receivable gets older or harder to collect. We can review the contract, evaluate the strength of a breach of contract or account stated claim, draft a demand letter that gets the customer’s attention, and tell you honestly whether litigation, settlement, or a structured payment plan is the smartest path. Call Fugate Gangstad Lowe at 317-829-6797 or reach us through our contact page to set up a consultation. The earlier you bring us in, the more options you have, and the more likely it is that the money ends up in your account instead of stuck on your aging report.
The information provided in this article is for general informational purposes only and does not constitute legal advice. Reading this article does not create an attorney-client relationship. For legal advice tailored to your situation, please contact our firm directly.