Florida's laws govern how and when debt collectors can obtain payment on unpaid bills. These laws also dictate where legal action can be filed on past debts. By federal law, debt collectors must file where the consumer lives or in the region where the consumer contracted the debt.
A consumer may negotiate with creditors to settle his debts by paying less money than what is owed, a process called debt settlement. Debt settlement laws offer consumers protection on accounts like credit cards and personal loans.
In Florida, settlement is an option for consumers who are falling behind on their payments. With the possibility of saving money, consumers may find the downsides of settlement acceptable. Downsides include an adverse effect on a debtor's credit score and the possibility of lawsuits from creditors seeking the full balance. While all states follow federal laws protecting debtors from harassment and abuse from collectors, Florida has extended those restrictions to original creditors, as well, providing another layer of debtor protection.
Statute of Limitations
Florida, among other states, has laws that govern the time limits in which either party may file civil suits regarding past contracts. Florida's statute of limitations on debt is five years, according to state statute 95.11. After five years, debt collectors may not sue debtors for nonpayment of credit card bills. These debts are then considered "time-barred debts." When a debtor is sued on a time-barred debt, the debtor may have the case dismissed by letting the judge or court know that the debt in question is time-barred.
Although a debt collector may not threaten a debtor with a lawsuit on a time-barred debt, the statute of limitations does not stop any collectors from attempting to collect. Beware of "re-aging" of old debts. By acknowledging or paying on old debts, consumers may unknowingly reset the clock on the statute of limitations. Any activity on an old account may cause the debt to be re-aged.
In some instances, state courts may announce a ruling that may take precedence over the statute of limitations, making the time limits on debts either earlier or later than state law. In these cases, court rulings in which a creditor files against a debtor, the statute of limitations will likely be ignored and the court's judgment enforced.
Homestead and Garnishment Laws
Florida laws offer a high level of protection for debtors' homes and wages, giving Florida debtors strong negotiation options with their creditors. If a debtor is not protected, she may be ordered by a judge to take a number of steps to pay back her debt. These could include having employers set aside wages until the debt is paid, known as garnishment, and the seizing of assets such as bank accounts. Florida laws protect the main provider in households from wage garnishment unless she authorizes such action in writing or fails to file for the "head of household" exemption. Florida debtors also have some protection from having the courts enforce the refinancing or sale of a property in the event of a lien. With some exceptions, as long as debtors file a homestead exemption, their homes are protected. Debtors should consult an attorney to make sure they qualify for and claim these exemptions.