When debt is taking over your life – and sucking up the better part of your paycheck – it’s time to figure out what to do about it and how to get your life back. In this article, we’re going to talk about unsecured debt collection in Florida and methods to deal with it. Let’s start off with the basics and then work our way up to approaches and solutions to reclaiming your life, your paycheck, and your future.
Debt comes in two different types, and they are treated very differently when it comes to collection actions against an unpaid balance. Collateralized debt is also called secured debt – such as mortgages, equity loans, title loans, and vehicle loans. When a secured debt goes unpaid, then the holder of the loan can go to court and foreclose or repossess the asset that secures the loan, then sell the asset to recoup their costs. With unsecured debt collection in Florida, whether it’s for loans, utility or medical bills, or credit cards, the holder of the debt has nothing to foreclose on and generally just proceeds right to collection actions.
Some creditors will keep your debt in-house and try to collect from you directly such as American Express or Capital One, but the most common approach to delinquent debt – debt that is 60 days or more overdue – is to charge it off. When a company undertakes a charge-off it is saying that the debt is uncollectible and writing it off its books as a loss. However, that is not the end of the debt. The originating creditor may bundle charge-offs and sell them to a debt collection agency or retain a debt collection agency or an attorney to go after debtors for them.
Agencies that purchase debt often behave very differently than agencies that are representing a company directly. Companies that buy debts pay pennies on the dollar. Say an account is delinquent for the amount of $1000, a debt purchaser may buy that debt for as little as $40. Naturally, older debts that have gone uncollected are cheaper and may have passed through several collection agencies.
Agencies and attorneys that undertake unsecured debt collection in Florida generally deal in specific types of debt. For instance, your unpaid MasterCard bill may go to an agency that specializes in collecting credit card debt while your medical bills may go to another agency. Some agencies will only collect on accounts within a certain dollar range, and reputable collectors will only try to collect on debt within Florida’s debt statute of limitations. Debts that have passed the statute of limitations is naturally purchased for very little, and generally by bottom feeder companies in or out of state who may employ questionable tactics in order to induce the debtor to pay.
Collectors – at least legitimate collection agencies and agents – are exquisitely aware of the Fair Debt Collection Practices Act or the FDCPA. This federal level law applies to all debt collectors and agencies, in all states, with substantial penalties accruing to those who violate the law. The law limits the times and places where you may be contacted, methods and frequency of contact, who may be contacted about your debt, and what the agency must disclose to you about the debt they are attempting to collect. Any agency that contacts you and violates any of these conditions should be immediately reported to the FTC.
While staying within the limits of the FDCPA, there is quite a lot that agents can do. When you are first contacted for an unsecured debt collection in Florida, whether it is by phone, letter, text, or email, the object is to apply pressure in order to secure payment. Naturally, one of the biggest factors in delinquent accounts is the impact on your credit report. Having an account go into collection is a significant strike against your credit score. Often, this is enough to induce people to enter into a payment agreement or settlement – if they have the wherewithal to do so. Of course, there is always the chance that he will not be able to make the agreed-upon payments in the account will go delinquent again.
If the amount is significant enough, and the collector or creditor believes there is a good chance of getting a judgment, then a lawsuit may be forthcoming. By law, you must be serviced with a summons to appear, and it is very risky to ignore collections attempts and summonses. If you fail to appear, there is always the chance that the creditor may win a default judgment against you. Just because you don’t show up doesn’t mean that nothing will happen. Once the agency or creditor has a judgment in hand, things can get a little rough. Your paycheck or bank account may be garnished, liens taken against property, or assets ordered sold in order to satisfy the judgment.
There are lots of different approaches to settling debts. You can negotiate for settlement which you can either pay off all at once or in installments, or you can arrange to make payments without a settlement. You may secure a consolidation loan to cover your debts, but when debt is overwhelming you need a lot more help than just adding on another payment to the pile. That is where Van Horn Law Group comes in.
At Van Horn Law Group we care about more than just billable hours. We have experienced staff and attorneys on tap to help you with your debt, whether your goal is simply to negotiate or to investigate the possibility of bankruptcy. We will let you know all of your options, and your first consultation is absolutely free. We also offer a no money down bankruptcy option to get you over the really rough spots and on with your life. Our offices in West Palm Beach and Fort Lauderdale are open Monday through Saturday, and walk-ins are welcome. Get in touch today!
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