Debt Relief Programs in Florida

Creditors have either four or five years to pursue Florida residents for outstanding debts, depending on what type of debt it is. Florida’s statute of limitations for written loans (e.g., most mortgages, car loans, personal loans, etc.) is five years. The state statute of limitations for revolving accounts (e.g., credit cards, other lines of credit, etc.) is four years. Four years is also the statute for orally agreed-upon loans.

Florida residents can’t go to jail for any outstanding or unpaid civil debt, which includes credit cards, personal loans, auto loans or medical bills. If you owe any of these, you won’t go to jail in Florida for them.

Taxes and child support don’t fall under the umbrella of “civil debt.” Residents can be jailed for unpaid taxes or child support if the amount due is seriously delinquent.

Florida law allows creditors to garnish residents’ bank accounts for past-due debts. Most debts, including credit card debt, personal loan debt and medical debt, require a creditor to obtain a court judgement before garnishing wages. Unpaid income taxes, child support and student loans don’t require a court judgement first, though.

The only creditors who can take your house in Florida are those that have a mortgage or lien directly against the property. Others, such as credit card companies, personal loan underwriters and medical debt collectors, can’t take your house in Florida.

Under state law, all Florida residents are entitled to a homestead exemption if they’re in collections for a non-mortgage debt. A primary residence and some land may be taken as the exemption. Up to a half-acre of land is allowed if you live in an incorporated city, or up to 160 acres are allowed if you’re in an unincorporated part of the state. Whatever your homestead is, a lender who doesn’t have a loan against the property can’t force a sale of the property.

Vacation homes and secondary residences aren’t protected by this homestead exemption.

A single creditor may repeatedly garnish your bank account, but they can’t entirely freeze it. Florida law places limits on how much may be garnished by a creditor. How much a creditor can garnish is based on your “disposable earnings,” which are your earnings after the legally mandated deductions (e.g., federal, state and local income tax) are subtracted.

If your disposable earnings in a week are less than 30 times the federal minimum wage, your earnings cannot be garnished. If your disposable earnings exceed this threshold, they may be garnished. The amount garnished is limited to either the amount you earn above this threshold or 25 percent of your disposable earnings, whichever is less. There also is a head of family exemption that might further limit what can be garnished if you qualify as the head of your family.

A debt collector may sue you in Florida for a past-due debt. They must sue you in court to obtain a judgement for garnishment. Debt collectors must be entitled to collect on the debt be within the statute of limitations to sue.