Florida Collection Laws
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- 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.
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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?
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
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Dealing with debt
If you are struggling with debt, you are not alone. According to the NY Federal Reserve total household debt as of Quarter Q1 2024 was $17.69 trillion. Student loan debt was $1.60 trillion and credit card debt was $1.12 trillion.
According to data gathered by Urban.org from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 10% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.
Collection and delinquency rates vary by state. For example, in Alabama, 15% have student loan debt. Of those holding student loan debt, 9% are in default. Auto/retail loan delinquency rate is 7%.
Avoiding collections isn’t always possible. A sudden loss of employment, death in the family, or sickness can lead to financial hardship. Fortunately, there are many ways to deal with debt including an aggressive payment plan, debt consolidation loan, or a negotiated settlement.
10 Comments
I have been granted a head of household wage exemption. What , if any, are the next steps the creditor can take? How long does an exemption remain in effect? I had a vehicle repossessed 13 years ago because I began having seizures and my husband at the time refused to pay the car payment. The judge ordered the exemption applies to me. I just want to know what else I can except from the bank or does the exemption close it out?
Hello Jennifer.
Thank you for reaching out. Please do not take my answer to be legal advice, as I am not an attorney and only attorneys can offer legal advice.
Typically exemptions will depend on the state to state. You will need to review your state's exemptions to determine the impact of the judgment.
Regards, Josh
What can a collection agency add on to a debt that a timeshare outfit turned over to them, for maintenance?
Hello Marion,
Thank you for reaching out. Please, do not take my answer to be legal advice as I am not an attorney. Only attorneys can offer legal advice.
I am assuming when you asked what a collection agency can add on to debt, you meant what charges you will incur while in their possession. The charges will be based on the terms and agreement of the original contract. For example, when you purchase a home a typical term for late payment is a late payment fee. This will depend on your original agreement.
If you have any further questions please let us know.
Regards, Josh
I have a collection on my credit report, this collection is due to a medical bill involved in a car accident liability a (LOP) letter was provided to the collection agency, I also have 2 insurances Medicare/Medicaid they only billed Medicare and not my Medicaid and they do accepted. This $35 collection dropped my credit by 69 points making me inelegible to get a House through the First Time Homebuyers and I was in the process of approval after an extensive fight cleaning my credit due to ID theft. This hospital bill was also inside my insurance post op global period of 90 days I was admitted to the hospital by my surgeon post hip fusion surgery. This Collection Company also have their Florida Consumer Collection Agency license expired since 12/31/2018
Melissa, I am sorry to hear how a number of small factors combined to delay your housing opportunity. I don't know which credit score model is being used to determine your score, but I am confident it is an old one. The newer versions don't hit your score for collection accounts that are originally less than $100.
Because the benefit of removing this item from your credit report is very strong and the size of the debt is small, the first thing I would do would be to contact the collection agency and see if they will agree to a pay for delete. That means you agree to pay them the $35 and upon receipt they will contact the credit bureaus and instruct them to remove the item from your report. I realize that it is not "fair" for you to pay for this when your insurance should have covered it. Fighting to get the insurance to cover it, at this point, is an arduous battle. If the debt were large, it would be different. If the collection agent agrees to a pay for delete, get something in writing that spells out the details (that you are paying $x for account # ___ with the understanding that collection agency Z will contact the credit reporting agencies and instruct them to remove the account).
How far back can a hospital try to collect on a debt that you have never been billed for? I have a bill from 2016 that was just sent to me for payment? Thank you!
Alexis, what happened to you certainly is not reasonable, but whether it is permitted I am not sure. It is not as simple a question as it sounds. What did the paperwork you filled out and signed at the hospital say? Did you have insurance? Did they cover anything? Are you at the same address that you were living at when you were hospitalized? Are you sure this is the first time they tried to collect (even if you are sure it is the first time they reached you)?
I recommend contacting the Florida Attonrey General's Consumer Protection Office. Here is their contact information. If they can't give you some information, you may need to seek an in-person consultation with an attorney. Please report back what you find out.