Florida Collection Laws

What can you tell me about Florida's statute of limitations rules for credit cards, and Florida's collections law?

I am confused about Florida Title 8, Chapter 95, which covers Florida's statute of limitations. What is the statute of limitations for credit cards? What can you tell me about Florida's collection laws?

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Updated: Sep 18, 2014

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Highlights

  • The Florida collection laws allow for wage and bank levies.
  • A creditor cannot seize a Florida resident's home.
  • Foreclosure takes five to six months in Florida.

A collection agent or law firm that owns a collection account is a creditor. A creditor has several legal means of collecting a debt. But before the creditor can start, the creditor must go to court to receive a judgment. See the Bills.com resource Served Summons and Complaint to learn more about this process.

The court may decide to grant a judgment to the creditor. A judgment is a declaration by a court that the creditor has the legal right to demand a wage garnishment, a levy on the debtor’s bank accounts, and a lien on the debtor’s property. A creditor that is granted a judgment is called a "judgment-creditor." Which of these tools the creditor will use depends on the circumstances. We discuss each of these remedies below.

Wage Garnishment

The most common method used by judgment-creditors to enforce judgments is wage garnishment, in which a judgment creditor would contact the debtor's employer and require the employer to deduct a certain portion of the debtor’s wages each pay period and send the money to the creditor.

In most states, creditors may garnish between 10% and 25% of your wages, with the percentage allowed determined by state law. Garnishment of Social Security benefits or pensions for consumer debt is not allowed under federal law, but may be allowed for child support. See the Bills.com Wage Garnishment article to learn more.

Florida’s Garnishment rules are found in Title VI, Chapter 77. In general, Florida follows the federal rules for the amount of a garnishment, which allows up to 25% of a worker’s wages to be garnished. For exemptions, Florida Title XV, Chapter 222 defines earnings and what is considered exempt. See the Dept. of Labor's Employment Law Guide - Wage Garnishment and the Dept. of the Treasury’s Answers About Garnishments. Municipal and state employees may be garnished.

Generally speaking, 401(K) or other retirement funds are exempt from garnishment. It is advisable to have those funds deposited into a separate bank account if you are concerned about garnishment on those payments.

Levy Bank Accounts

A levy means that the creditor has the right to take whatever money in a debtor’s account and apply the funds to the balance of the judgment. Again, the procedure for levying bank accounts, as well as what amount, if any, a debtor can claim as exempt from the levy, is governed by state law. Many states exempt certain amounts and certain types of funds from bank levies, so a debtor should review his or her state’s laws to find if a bank account can be levied. In some states levy is called attachment or account garnishment. The names may vary but the concept is the same.

In Florida, a levy (called attachment) is allowed under Title XXXIX, Chapter 679.2031. Levy is allowed if the plaintiff possesses a a writ commanding the sheriff to seize and sell as much of a debtor’s property as is necessary to satisfy a creditor’s claim.

If you reside in another state, see the Bills.com Account Levy resource to learn more about the general rules for this remedy.

Lien

A lien is an encumbrance — a claim — on a property. For example, if the debtor owns a home, a creditor with a judgment has the right to place a lien on the home, meaning that if the debtor sells or refinance the home, the debtor will be required to pay the judgment out of the proceeds of the sale or refinance. If the amount of the judgment is more than the amount of equity in your home, then the lien may prevent the debtor from selling or refinancing until the debtor can pay off the judgment.

Florida allows a lien for a money judgment. Under Title XL, Chapter 713, mechanics and contractors (and similar laborers and professionals) a have the right to place a lien on a property. This also includes creditors for unsecured debt (credit cards, auto loans, etc.), see Florida law Title XI, Chapter 55.10.

A judgment-creditor may not seize a judgment-debtor’s residence under Florida law.

If you reside in another state, see the Bills.com Liens & How to Resolve Them article to learn more.

Florida Statutes of Limitations

The statute of limitations is governed by Florida Title VIII Limitations, Chapter 95.11. The statute of limitations on consumer issues are as follows:

  • Open account (i.e., credit card): 4 years (Florida 95.1(p))
  • Written contracts: 5 years
  • Real property actions: 7 years
  • Foreclosure: 5 years
  • Foreign judgments: 5 years
  • Domestic judgments: 20 years

Collection agents violate the FDCPA if they file a debt collection lawsuit against a consumer after the statute of limitation expired (Kimber v. Federal Financial Corp. 668 F.Supp. 1480 (1987) and Basile v. Blatt, Hasenmiller, Liebsker & Moore LLC, 632 F. Supp. 2d 842, 845 (2009)). Unscrupulous collection agents sue in hopes the consumer will not know this rule.

Florida Foreclosure

Florida foreclosure laws are found Title XL, Chapter 702 to learn more about the rules surrounding foreclosure in this state, including deficiency balances (Chapter 702.06). To learn how to prevent foreclosure in Florida, see the Bills.com resource Florida Mortgage Foreclosure & Short Sale.

Florida Usury Law

See the Bills.com resource Florida Usury Law to learn the maximum interest rate that can be charged a consumer in Florida.

Florida Payday Loan Collection

See the Bills.com resource Payday Loan and the FDCPA to learn how Florida law protects consumers of payday loans.

Florida Collection Agency Law

The Florida Consumer Collection Practices Act (FCCPA) mirrors the federal Fair Debt Collection Practices Act, and adds two elements not found in the FDCPA:

  • Original creditors must follow the FCCPA's rules when collecting a delinquent debt.
  • Collection agents, but not original creditors, must be registered with the Florida Office of Financial Regulation

Violation of the FCCPA is not a crime, but opens a collection agent or original creditor to a civil action (a lawsuit). Consult with a lawyer to discuss filing a civil lawsuit if you have been victimized by a collection agency. Some lawyers take these cases on a contingency basis, which means no out-of-pocket costs to you. Also, file a complaint with the Florida Office of Financial Regulation and the federal Fair Trade Commission.

See Florida § 559.55 to 559.785 to learn more about the Florida Consumer Collection Practices Act.

Florida Spouse's Debt Liability

When it comes to family law, Florida is a common law state. Generally, the property acquired by each spouse during marriage is presumed to be separate property. The exception is for property purchased jointly, which is considered jointly owned property. Each spouse's separate debt is their own, and creditors cannot pursue the other spouse for payment. Exceptions to that rule apply.

The Florida Supreme Court abolished the doctrine of necessaries in 1995 (Connor v. Southwest Florida Regional Medical Center, Inc., 668 So. 2d 175 (Fla. 1995)). This means spouses do not have liability for the expenses incurred by the other spouse for their necessary care, such a medical debts.

Recommendation

Consult with a Florida attorney experienced in civil litigation to get precise answers to your questions about liens, levies, and garnishment in Florida.

I hope this information helps you Find. Learn & Save.

Best,

Bill

Bills.com

120 Comments

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  • MA
    Jun, 2014
    Mike
    What happens if a creditor (Credit Card) files a civil suit against you (in FL) but you no longer live in the US (have lived overseas for 5+ years), and you don't own any property in the US either. I have a old bank account but that doesn't get used either. I don't know how you're supposed to be notified of a lawsuit. I get mail from time to time forwarded by an aunt - and received 2 "solicitation" type letters from lawyers/consultants noting they saw a lawsuit filed. I've not seen or heard anything. Do they have to personally serve something to me? That would obviously be impossible. Thanks.
    0 Votes

  • AH
    May, 2014
    Ashley
    If I live in Texas, a no-garnishment state, and have old unpaid bills. I am considering moving to Florida. Can my wages be garnished for those debts if I move?
    0 Votes

    • BA
      May, 2014
      Bill
      The short answer to your question is yes.

      Here's a more complete answer. The creditor has three jurisdiction options when a debtor changes their state of residence.
      • File a lawsuit in the debtor's old state of residence, assuming the contract the two parties signed allows it. Assuming the creditor wins, the creditor would domesticate the judgment in the debtor's new state of residence, and use the new state's collection laws to collect the judgment.
      • File a lawsuit in the debtor's new state of residence. If the creditor wins, it could use the judgment to collect the debt in accordance with the new state's collection laws.
      • The original creditor (but not a collection agent) could file a lawsuit in a third state, if the contract allows it. The original creditor could then domesticate the debt in the debtor's new state of residence, and use the new state's collection laws to collect the debt.

      You may want to consider contacting the creditor now, to negotiate a settlement. The fact that you are in a state that doesn't allow garnishment increases your leverage. Avoid mentioning that you're considering moving. Perhaps you could say that you are working to clear out the derogatory items on your credit report and are interested in settling. Start with a low offer.

      Consult with a lawyer if you receive a notice of a lawsuit filed against you.

      0 Votes

  • AH
    Apr, 2014
    Amanda
    I had a joint car loan with my father that was paid in full for the loan amount time. The truck was turned in 9/27/2011 but because of the "overage in miles" they are stating we owe 20,095. Is there a time limit on when they can take me to court? I saw on my credit report they marked it as Account Charged off. Last report date was 04/2012
    0 Votes

    • BA
      Apr, 2014
      Bill
      In almost all states there is no time limit for a creditor to bring a lawsuit. Statue of limitations (SOL) vary by state and type of debt. For example, it is five years for a written contract in Florida. Although I cannot give you legal advice, I would recommend that you do not avoid responding to a summons. If the SOL has expired you will need to appear and make an affirmative defense. In general, the SOL period begins with the date of first default. The charge-off date on credit report is not an accurate representation of either the SOL or the time frame in which the negative account falls off your credit report.
      0 Votes

  • DG
    Apr, 2014
    Daniel
    I took several courses at Johnson and Wales under a scholarship I was given (I have a copy of the award). It's been 10 years now and they refuse to give me my transcript saying I owe $3800.00; they say they will not give me my papers since they have no evidence of the scholarship. What recommendation do you have for me.
    0 Votes

    • BA
      Apr, 2014
      Bill
      Have you considered sharing a copy of the scholarship information you have with the school? Send the school a letter describing the scholarship, and include copies of your scholarship paperwork.
      0 Votes

  • YL
    Apr, 2014
    Yvette
    For over 18 months, I was making monthly payments to a debt consolidation agency to negotiate payments with my creditors; however, I got laid off (for 2 months) and of course, I was not able to could to make payments. I called the debt consolidation agency to let them know my situation and they put my account "on-hold." I got another job, but it has not been easy to catch up, and my account is still on an on-hold basis. I just got served with a summons to appear in court next week for a pre-trial/mediation. This is for a credit card -- I owe $1,500. I immediately contacted the debt consolidation agency that was handling my payments. I was told because I have not been making any payments they cannot get involved. What are the legal ramifications if I don't appear in court? Should I contact a lawyer? Should I reach out again to the debt consolidation staff and ask them to assist me? I'm terrified!
    0 Votes

    • BA
      Apr, 2014
      Bill
      Consult with a lawyer immediately. If you cannot afford a lawyer and reside in Florida, contact Florida Legal Services or another Florida pro bono program to get no-cost legal advice.

      If you take no action you will lose by default.
      0 Votes