How Long Can Consumer Debt in Florida Remain Open?

Consumer debt is defined as debts that are incurred for a personal or household purpose. They are composed of consumer or personal items that do not appreciate in value or financial instruments such as payday loans and automobile loans. US consumer debt is at a total of over $3 trillion and is seen in financial quarters as an indication of a solid labor market and economic growth as most borrowers are not having difficulty meeting their monthly payments. However, US banks, perhaps seeing something that the rest of us don’t, are pulling back from their riskiest loans and tightening the purse strings while at the same time arguing the economy has never been better.

Folks, we’ve been here before.

During the Great Recession, Florida was hit hard. We had one of the highest rates of unemployment, bankruptcy, and consumer debt in the nation. Going into 2019, it’s time to take a look at debt and how long consumer debt in Florida can follow you around. Not many people know that Florida has statutes of limitations on debt collection. Let’s break it down.

State law limits debt collection for written contracts or promissory notes to five years.
Oral contracts – when you borrow money and promise verbally to pay it back – are limited to four years for collection.
Open-ended accounts such as credit cards and store cards are limited by law to four years collection.

These limits do not affect the appearance of debt on your credit report. Once that debt hit your credit report it is there for seven years unless it is paid or wiped out in bankruptcy. There are some collection agencies who will try to sue for debts that are technically uncollectible. These debts are referred to as time-barred debts, being too old for the originating creditors or debt collectors to legally sue.

Tricky Tricks to Collect Consumer Debt in Florida

Now, there is nothing that prevents a collection agency from contacting you about time-barred consumer debt in Florida. They are not obligated to tell you that a particular debt is time-barred. If you are being contacted by a collection agency, ask them if the debt is beyond the state statute of limitations. Federal law requires that they answer truthfully, but they are not obligated to answer at all. If they decline to answer, then you could try asking if their records note the date of your last payment. If they can’t confirm the date of your last payment your next steps are critical.

Under no circumstances should you pay until you have confirmation of the debt. They need to send your written notice of the debt. Your written response within 30 days should say that you are disputing the debt and need to verify the information that they have concerning it.
Do not make a payment as that resets the “debt clock” and puts you back on the hook to resolve the debt. Many debt collectors will try to suddenly bully you into making a partial payment, or agreeing to a payment plan in order to reopen the debt.
Stand on your FDCPA rights. This act was passed in the down and dirty days of the recession as abusive debt collection practices multiplied. The Fair Debt Collection Practices Act prevents collectors from suing you or threatening to sue you over a time-barred debt.
Keep all copies of correspondence, and notes on any other contact by phone, email, or text.
Remember, collectors must stop contacting you if you tell them cease-and-desist. They will still try to collect on the debt, but they may not harass you to do it.

“But We’re Going to Sue You Anyway”

Despite the fair debt collection practices act forbidding creditors or collections agencies to sue on a time-barred debt, they do it anyway. After all, they don’t tell you about it in their conversation, then it’s not threatening you – right? Now, once they file a lawsuit, they are required to serve you with notice of being sued. Often, the shady collectors don’t really try to accurately serve notice of the lawsuit. They may send it to a former address or simply drop the notice in the sewer. Debt collection agencies do this so that you will not show up in court and so that they can receive a default judgment. Even if you do receive notice of the lawsuit, it is imperative that you do not ignore it. Show up and defend yourself with documentation that the debt is time-barred, or hire an attorney to represent you in court.

If You Have a Judgement

It’s amazing that they can’t seem to find you to serve the summons, but they can find you with the judgment. Yet, there you are holding a judgment for time-barred consumer debt in Florida and facing the possibility of garnishment or liens. It is possible to get the judgment reversed on this zombie debt, especially if you can prove the debt was time-barred when they filed the lawsuit. It’s important to get sound legal advice as you attempted to navigate the courts and avoid actions by the debt collector. If you are in enough debt, you may also be able to avoid the judgment by filing for bankruptcy. The automatic stay will immediately void any civil judgment and stay collection actions until the bankruptcy is discharged.

Get Help

Sound legal advice can make all the difference in a case like this. Florida debt and bankruptcy law are complex, and a matter of both state and federal jurisdiction. Van Horn Law Group is staffed by debt experts – experienced attorneys and staff who can help you get your case to a good resolution. Our offices in West Palm Beach and Fort Lauderdale are open seven days a week and your initial consultation is free. Whether you need bankruptcy advice or just need to get time-barred consumer debt in Florida off your back, we are here to help. Get in touch with us today and let’s start knocking down your zombie debts for 2019.