Using contempt to collect a debt is not allowed under Indiana law. Contempt permits imprisonment. Indiana forbid imprisonment for debt in 1851.
Contempt requires the intentional and willful disobedience of a court order. Therefore, contempt and debt collection can only intersect after there is a judgment on the debt.
The process of collecting the judgment is either by way of the judgment debtor agreeing to their debt or initiating involuntary methods such as proceeding supplemental to execution, garnishment, attachment and/or execution.
A debtor can agree to make payments on a judgment and the court can incorporate that agreement into an Order. I know of cases where the trial judge has made an Order on the debtor's promise to pay and the attorney then used contempt when the debtor failed in amking payments.
This differs from the situation where the debtor ordered into court for a hearing does not appear. Contempt properly exists for these situations. The debtor faces imprisonment not for the debt but for disobeying the court's Order to appear.
In my opinion, the collection attorney using contempt for collecting a debt violates the federal Fair Debt Collections Practices Act (the FDCPA). The FDCPA forbids the use of illegal means collecting debts.
Using contempt for debt collection has the collections violating Art. I, §22. That the debtor only suffered the threat of imprisonment is not a defense for the collection attorney. Case law shows that the threat of illegal activities suffices for a successful FDCPA action. All the collection attorney does by using contempt for collecting a debt is create a credible suit against one's self under the FDCPA.
One final point, using contempt for debt collection serves no truly useful purpose. Many methods exist for the competent collections attorney to collect a debt and contempt lacks any utility comparable to garnishment or attachment. a competent collections attorney also knows what debts can be collected or not. Striking terror in the heart of debtors seems the only use for contempt which is not useful when the purpose of a collections attorney is to get the money.