Are you struggling with excessive debt?
Debt collectors threatening to sue you if you don't pay up?
If so, relief may be on the horizon.
In this post, we'll discuss your options for resolving excessive debt scenarios in Florida and how to avoid costly collection lawsuits.
5 Debt Relief Options For Florida Residents
First, let's take a look at your options
The good news is you do have options. The bad news is you don't have a lot of options.
It all boils down to these five:
1. Bankruptcy. Usually a last resort for most people since it can appear on your credit report for up to 10 years. Bankruptcy is also a matter of public record for anyone that wants to know. You’ll have to appear in Federal Court for at least one hearing, possibly more. Bankruptcy could also be problematic if your current job requires a background check or security clearance.
2. Consumer Credit Counseling. You make one monthly payment to an accredited consumer credit counseling agency, then they disburse your funds proportionally and pay each creditor on your behalf.
This approach can get your interest rate lowered slightly and stop the harassing collection calls. However, you will still be required to pay the full balance owed plus interest. No debt relief is granted.
3. Get A Debt Consolidation Loan. Certainly not the worst thing you could do. But getting a loan usually requires you to own a home or have some property/assets to pledge as collateral, otherwise a loan isn’t an option. In addition, you can't borrow your way out of debt. You’re still going to have to pay back the money ... plus interest. As with the previous option, no debt relief is granted.
4. Do Nothing. This is not a practical solution for most people, but technically it is an option. An example where doing nothing might work is if you were unemployed or retired and had no assets a creditor could pursue. As the saying goes, you can't squeeze blood from a turnip. However, this does not mean they can’t come after you at a later date, when you least expect it. The downside with this option is that you'll still be hassled by debt collectors and your debts will still be there when you wake up in the morning, accruing interest every day.
5. Negotiate Settlements For Less Than Full Balance (aka "debt settlement"). In certain situations, if handled correctly, most creditors will agree to accept less than full balance to settle outstanding debts — sometimes for as little as $0.30-$0.50 on the dollar. You get much-needed debt relief without filing bankruptcy.
You can keep searching for more debt relief options, but after 15 years of helping client resolve excessive debt situations I assure you all roads lead back to one of these 5 options.
How To Avoid Debt Collection Lawsuits In Florida
Short answer ... don’t ignore past due debts.
If credit card companies can’t collect their money on a voluntary basis, they do file lawsuits to collect outstanding balances.
Scaring is caring.
The debt collection process varies from one credit card company to the next, but the debt collection process generally goes something like this:
- For the first 90 days of delinquency, collections are usually handled by the credit card company’s in-house collection department.
- From 90-180 days of delinquency, the credit card company might continue with their own in-house efforts or they might outsource collection efforts to an outside debt collection agency or they might send your account straight to an attorney to proceed with litigation against you.
This is why it's so important to know who you're dealing with and how they typically handle past due accounts.
Unfortunately credit card companies don't post their collection strategies publicly. You only get access to this information by working in this industry week in and week out like we do.
If you'd like a free assessment of your current situation, just click here. We can tell you with a high degree of accuracy the likely outcome based on your creditors.
IMPORTANT: Certain “experts” advise sending a cease and desist letter to a creditor or collection agency as a way to magically stop collection calls. This is a very bad idea. With certain credit card companies, a cease and desist letter is an automatic trigger to fast-track your account for litigation. If your goal is to negotiate a settlement with a creditor, you need to keep an open line of communication. For these reasons, we never recommend sending a cease and desist letter.
Statute Of Limitations On Florida Credit Card Debt
In the state of Florida, the statute of limitations on credit card debt is five years.
This means that a creditor has up to five years to sue you in order to collect an outstanding debt. After this time period expires, the creditor can no longer pursue legal action against you. However, if you make a payment or even acknowledge that you owe the debt, the statute of limitations clock starts ticking all over again. 😮
So when exactly does the statute of limitations clock start ticking on credit card debt for Florida residents?
Answer: The day you miss your first payment. That means a creditor has 5 years from that date to sue you for the outstanding balance.
However, here's where things can get ugly.
If a creditor sues you and prevails in court with a judgment against you, that judgment has a statute of limitation of 20 years. That means you'll need to be looking over your shoulder for the next 2 decades!
A creditor with a judgment can garnish wages, seize property or money in bank accounts. For these reasons, it's usually best to work things out with creditors before they file a lawsuit against you.
The request a free, no-obligation phone consultation with our office click here.
Florida Debt Relief: Working With A Debt Relief Company
For years we've helped Florida residents resolve excessive debt problems (without bankruptcy) and perhaps we can help you.
We routinely settle our clients' debts for $0.30-$0.50 on the dollar. Here's proof.
NOTE: To avoid confusion, a debt relief company and a debt settlement company are the same thing.
The general concept with debt settlement is you negotiate a mutually acceptable settlement amount (for less than full balance) with a creditor or collection agency to resolve an outstanding balance.
The creditor or collection agency confirms the settlement in writing. You then remit the settlement funds prior to the agreed upon deadline. When your funds have cleared your bank, your account is settled and no further balance is due.
For additional details on how debt settlement works, please click here.
You might be wondering, "Why would a creditor accept less than full balance? What’s their motivation?"
It’s purely a business decision. It takes time, effort and money to collect past due debts and/or take people to court. Under the right circumstances it makes more financial sense for a credit card company or collection agency to cut their losses, settle and move on. It’s all about maximum net recovery and “not throwing good money after bad money”.
Should I Hire A Debt Settlement Company Or Attempt Settlements On My Own?
It is entirely possible to settle your credit card debt on your own so you can avoid paying a fee to a debt settlement company. Nothing wrong with trying to save a few bucks.
However, you need to be aware of the following:
Conclusion
If you are a Florida resident and struggling with debt, there are options available to you. Since 2006, our office has obtained millions of dollars of debt relief for our clients without needing to file bankruptcy.
To see if you qualify for debt relief, contact our office to request a free, no-obligation phone consultation. We'll assess your situation and within minutes you'll know if you're eligible.
