Florida Credit Card Debt Laws

It's always a balancing act for a state to craft a set of laws involving credit card debt. The laws must offer reasonable protections to debtors but also give the companies issuing the cards a chance to recoup their money. Florida credit card laws, like those of every other state, allow credit card companies to sue consumers who run up their cards and don't pay. However, they also give Florida debtors protections, including a shorter period of time in which they can be sued for credit card debt, limitations on the ways a creditor can contact them and protections for their wages and property.

The days when cash was king seems as long ago and far away as the age of the dinosaurs. Yes, you can still buy things with greenbacks, but few and far between are the households without at least one credit card. It's so convenient to pull out the plastic instead of bringing along cash, and it's easy to think of using a credit card as safer than paying with "real" money. But, as many Americans have learned the hard way, credit card use does involve real money, and its ease of use carries risks of its own.

In Florida, credit card debt has proved a problem. For some years, the average Florida consumer carried an amount of credit well above the national average, reaching a high of over $7,500 a few years back. As of 2016, the average had fallen to 19th nationally at just over $5,500. While the drop in credit card debt is a good sign, the relatively high average credit card debt amount is not. Lawmakers in the Sunshine State had to craft protections for the creditors and for the debtors. A review of Florida credit card laws shows that they did both.

If you are a Florida resident with credit card debt, you may wonder: Can a debt collection agency take me to court? Can they garnish my wages for credit card debt in Florida? Can a debt collector sue after the statute of limitations runs? While you can be sued in Florida for unpaid debt, creditors have a limited period of time in which to head to court and are restricted in what types of wages they can garnish.

You may have heard of statutes of limitations that prohibit prosecution of criminal cases after a certain number of years have passed, for example, for theft or speeding tickets. Statutes of limitations are laws that set out a time period in which someone can be brought to court, and they apply not just to crimes but also to civil cases like debt collection. The intention of these laws is to require lawsuits to be brought fairly close to the time of an act, so that the court is presented with the best evidence. For example, if you could sue for an automobile accident 25 years after it happened, witnesses and auto repair records may be impossible to find.

Do statutes of limitations apply to debt? They do. While the general statute of limitations in Florida for collecting a debt is a whopping 20 years, the laws are more restrictive for credit cards. The Florida statute of limitations on credit card debt gives a credit card company only four or five years to sue. The time is four years if the credit card company and the consumer do not have a written agreement. It can extend to five years with a written agreement. After that time period, the statute of limitations is said to be expired. An expired statute of limitations is a good defense to a suit by a credit card company, and a Florida judge will dismiss a case against you if brought outside that time period.

Note that the fact that the statute of limitations has expired does not prevent a creditor or debt collector from trying to collect. And, if you pay some money on a debt barred by the statute, the company may claim that the payment reset the the clock on the statute of limitations.

If you have ever heard stories of debt collectors phoning debtors in the middle of the night, you will be happy to hear that you are protected against this and other abusive debt collection practices in Florida. Both federal law and state law make abusive and misleading consumer collection practices illegal.

The federal law that protects debtors is termed the Fair Debt Collection Practices Act. It limits the kind of actions debt collectors can take to get you to pay a credit card bill. For example, under the FDCPA, debt collectors are not permitted to call you at work or talk to any third person about the debt, and they are not allowed to harass, abuse or mislead you into paying a debt. However, this federal law doesn't apply to your credit card company (or any other original creditor), just to debt collectors and third-party debt buyers.

Debtors in Florida are also protected from abusive collection practices by Florida state laws. The state has enacted laws to supplement the FDCPA, and provide a Florida debtor with greater protection than the federal law does. Florida's Consumer Collection Practices Act (FCCPA) extends the protections offered by the federal law to debtors by making the law applicable to original creditors as well as debt collectors.

Florida creditors cannot threaten or harass debtors, cannot communicate with a debtor's employer before they have a court judgment in hand, and cannot contact debtors after 9 p.m. or before 8 a.m. about the debt. The FCCPA also prohibits creditors and debt collectors from a variety of other abusive or deceptive acts. These are not spelled out very clearly in the law, but have been held to include:

• sending you documents that look like official court papers but are not,
  
• telling you that attorneys are involved if they are not,
  
• dealing with you or writing to you directly if you have informed them that you have an attorney,
  
• pretending to be a police officer,
  
• pretending to act for a government agency, and
  
• sending you postcards or letters in envelops with words visible that could embarrass you. 

What can you do if a creditor or debt collector violates these laws? Then it is your turn to go to court for damages. You can file a Florida lawsuit against the credit card company for any moneys you have lost, statutory damages of $1,000, attorney fees and, sometimes, extra amounts to punish the company for abusive behavior.

Credit card companies have more rights after they go to court and win a judgment against a debtor in Florida. At that point, Florida credit card law permits the company to take various actions toward collecting the debt. These include taking money from your bank accounts, taking personal property and garnishing wages. But there are limitations.

Can a creditor take all the money in your bank account? Maybe not. A credit card company or its debt collector agency can seize a debtor's bank accounts and take some types of personal property like cars and other vehicles, boats, computers and electronics, furniture and jewelry. In Florida, a debtor's car exemption is small, one vehicle worth $1,000 or less. Likewise, the debtor can select one other personal property item worth $1,000 or less as exempt. Non-exempt property can be sold at a public auction to the highest bidder to pay the debt.

Note that various types of assets are protected from creditors under Florida law. These include life insurance policies, disability payments, annuity contracts, retirement plans including IRAs and pre-paid college tuition. Under federal law, Social Security payments cannot be garnished for credit card debt.

When someone has overwhelming credit card debt and is living paycheck to paycheck, one of the big fears is that the company will grab money from that paycheck in a procedure called a wage garnishment. Wage garnishment is a legal process creditors can use once they get a court judgment saying that you owe them money. This is also called a "money judgment." With a money judgment against you in hand, a credit card company can get a writ of wage garnishment from the court. This document orders your employer to withhold earnings from your paycheck and send the money directly to the company to pay down your debt.

In Florida, the rules on wage garnishment are essentially the same. But that doesn't mean that the company can get all or even most of your paycheck. Florida wage garnishment law piggyback on the federal Consumer Credit Protection Act. The federal law limits the amount of your income that can be garnished by a creditor to no more than 25 percent of your paycheck, or, alternatively, the amount of your wages that exceeds 30 times the minimum wage, whichever is less.

That means that in Florida, only money you earn above that base amount can be garnished. Florida wage garnishment laws protect earnings as they are paid by the employer but also wages you have deposited in a bank account if you can prove it was income. Don't mix wage income with other income or you will have a hard time establishing income.

Are you the "head of household" under Florida law? If so, the law gives you extra wage garnishment protection. Under Florida Statute 222.11, this is the definition of "head of household" under wage garnishment law: “any person who is providing more than one half of the support for a child or other dependent.”

That means that you are a head of household if you are an adult and you provide significant support to someone who lives with you, like your spouse, your child or an elderly parent. If you qualify and your wages are not more than $750 a week, they cannot be garnished at all.

If you are making over that amount, it is still very difficult for a creditor to garnish your income. The law only allows "disposable income" over $750 to be taken, meaning income remaining after deductions required by law. In addition, you must have agreed to waiving this garnishment protection in writing. The waiver must include this language in at least 14-point type:

"IF YOU PROVIDE MORE THAN ONE-HALF OF THE SUPPORT FOR A CHILD OR OTHER DEPENDENT, ALL OR PART OF YOUR INCOME IS EXEMPT FROM GARNISHMENT UNDER FLORIDA LAW. YOU CAN WAIVE THIS PROTECTION ONLY BY SIGNING THIS DOCUMENT. BY SIGNING BELOW, YOU AGREE TO WAIVE THE PROTECTION FROM GARNISHMENT."

A "head of household" exemption doesn't just fall from the sky, however. If you qualify for head of household exemption in Florida, you need to claim it to be protected by this law. Some people say you should file an affidavit in court asserting your status as head of household, but there is really no procedure in Florida law for you to do this before a wage garnishment is issued. Perhaps a more effective procedure is for you to wait until the wage garnishment writ is issued and given to your employer. You might file a claim of exemption with the court that issued the writ at that point, or else raise the exemption in a motion to dissolve the wage garnishment.