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How Long Can Collections Stay On Credit Report In Florida

Debt Relief Programs In Florida

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Debt relief is available in Florida to those who feel overwhelmed by what they owe. Relief comes mainly via banks, credit unions, online lenders and debt-relief companies . All have people who specialize in offering help to solve the debt dilemma, especially credit card debt.

Five programs can address debt concerns, including debt management programs, debt consolidation loans, debt settlement, nonprofit debt settlement and bankruptcy. Each program has benefits that should be weighed against the negatives.

Here is a look at each program to help you determine what works best if you seek Florida debt relief:

Understand What Credit Card Rate Reduction Services Do

A growing trend within the debt relief industry is companies offering only credit card rate reduction services. Essentially these companies will, for a set fee, negotiate lower interest rates with your credit card companies. In most cases, you can negotiate lower credit card interest rates on your own, without the assistance of a third party. Before you call your credit card company, research the going interest rates for other credit cards and their requirements. Knowing this information shows your credit card company that you have shopped around and might stop using their card. Dont be afraid to ask for a supervisor or someone authorized to negotiate interest rates.

Statute Of Limitations In Florida For Debt

The statute of limitations for debt in Florida is usually five years. This means that a creditor has five years to start a lawsuit against you for the money you owe. This is because most debts are based on written agreements.

The law says the following about lawsuits based on a contractual debt in Florida:

Actions other than for recovery of real property shall be commenced . . . within five years: a legal or equitable action on a contract, obligation, or liability founded on a written instrument.

Section 95.11, Fla. Stat.

Clients sometimes ask us how long a debt collector can pursue them for an old debt in Florida, or how long they can legally be chased for a debt in Florida. The default answer is five years. You should check the statute to see if the type of debt falls into a special category.

Tip: If the creditor has filed a lawsuit after the statute of limitations has expired, that is usually a complete defense to liability.

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Acknowledge It And Set Up A Payment Plan

If you dont want to ignore the debt and cant or dont want to repay it in full, you can acknowledge the debt and set up a payment plan with the creditor. This might include making required monthly payments until the debt is paid in full, or trying to settle your debt for less than the full amount.

Do I Still Have To Pay The Debt

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If youre wondering how long something stays on your credit report, its important to keep this in mind: Your debt isnt simply erased once it falls off your credit reports. If you never paid off the debt and the creditor is within the statute of limitations, they may try to collect the money. The creditor can call and send letters, sue you or get a court order to garnish your wages.

Even outside the statute of limitations, collection companies can still try to collect the debt. Stale debts represent a thriving business, as they are often sold and resold for pennies on the dollar. Even a partial payment makes a call or letter worthwhile for the collector.

The only sure way to get rid of a debt is to pay what you owe, or at least an agreed-upon part of what you owe. If youre looking to put your debt behind you and move on with a clean slate, contact the collectors listed on your credit report. Before making the phone call, make sure you know:

  • The debt is legally yours.
  • How much you owe the creditor.
  • What you can realistically afford to pay per month or in a lump sum.

If you negotiate a payment for less than the full amount owed, be sure to get the payment agreement in writing from the collector before you send in any payment.

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Should You Consider A Debt Consolidation Loan

Consumers have a number of options available to pay off outstanding debt, even if the debt has been sent to a collection agency. You can begin by initiating a conversation with the creditor or collection agency to establish a manageable repayment plan or to settle on a lower total amount owed. But if youre not comfortable doing that, another option may be a type of personal loan known as a debt consolidation loan.

A personal loan will generally offer a rate lower than credit cards, says Micheletti. A consumer could consolidate their credit card debt into one personal loan at the lower rate. If going this route, the consumer should use 100 percent of the proceeds from the loan to pay off outstanding debts in order for this option to be effective.

No matter which route you choose, make sure you keep tabs on your debts timeline and know your rights when it comes to debt collecting agencies.

Learn more:

What Is The Statute Of Limitations For A Car Accident In Florida

In Florida, the statute of limitations for personal injury based on a car accident is only four years. This is a shorter time frame than debt based on a written contract. An injured person will have a full four years after the accident to file a lawsuit against you. However, most personal injury lawsuits based on car accidents are filed much sooner because the evidence is fresher, and the claimants would rather reach an early settlement.

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Florida Statute Of Limitations For Debt Compared To Other States

The statute of limitations for debt in Florida is one of the lowest in the country at only five years. Many states instead have a statute of limitations for six years. Some states even set the statute of limitations at ten years for debt based on written contracts.

Furthermore, Florida asset protection laws are some of the strongest in the country, making the state very debtor-friendly compared to others.

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Should I Pay Off My Collection Account

You may be wondering if its even worth it to pay a collection account. After all, the damage has already been done, right? There are, however, several reasons to take that step.

First, in one of the newer FICO scoring models, FICO 9, paid collection accounts no longer hurt your credit score. Unfortunately, many lenders are still using older FICO models. This means that it may take a while for that feature to work in your favor.

Even without the credit score aspect, though, there are several reasons to consider paying off the account. Most importantly, it keeps the collection agency from suing you. If this happens and the agency wins, the court may pass judgment allow them to garnish your wages and place liens against your property. Its also possible to have your bank account funds frozen or garnished to satisfy the debt.

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How To Monitor Your Credit Report

Everyone should review their credit report every 6 months to a year. To ensure there is no suspicious activity. This allows you to follow up with your goals as well. Thereby allowing you to improve your credit score and correct any mistakes you have made.

Below are the links to contact both Canadian credit reporting agencies. Both agencies offer a free credit report in Canada each year.

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Be Careful When Dealing With Debt Collectors

Some debt collectors attempt to cheat the system, which is why you should be on your toes as a consumer, even if the debt is actually yours. When it comes to your own personal finances, no one else is going to have your best interest at heart.

You should be informed of the Fair Debt Collection Practices Act , which is a federal law, and your states laws and rules that govern debt collection. Debt collectors are notorious for their unscrupulous tactics when it comes to attempting to get consumers to pay up on past-due debt.

If a debt collector violates the terms of the FDCPA, you can file a complaint with your local attorney generals office, the Federal Trade Commission , or the Consumer Financial Protection Bureau .

In many cases, consumers pay off these debts because they continue to appear on their credit reports. Just because the debt appears on your credit report doesnt necessarily mean you have to pay it.

The only time you should pay an old debt beyond the statute of limitations is if you know you can get a debt collector to remove the negative item from your credit report. The statute of limitations on debt is an entirely separate issue from the reporting limits on debt on your credit report.

Should You Pay The Debt Collector Or The Original Creditor

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If you already have an account in collections, meaning the original creditor has already closed your account and transferred it to another owner, you should not pay the lender that the loan was originally from. The debt now belongs to someone else, so it would be pointless to pay the original creditor.

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When Does The Reporting Clock Start

The credit reporting time period for debt collections starts from the date of the delinquency that caused the collection. With collections resulting from a charge-off, it starts the date the account was charged off . So, if you were first late in February 2013 and the account was charged off in July 2013, the account should fall off after July 2020. Some versions of your credit report may include phrasing that indicates when the collection will fall off your credit report, such as, “Scheduled to report until 06/2020.

The for debt collections is based on your delinquency with the original creditor, not when the debt collector started collecting on the debt.

Collections On Your Credit Report

When an account becomes seriously past due, the creditor may decide to turn the account over to an internal collection department or to sell the debt to a collection agency. Once an account is sold to a collection agency, the collection account can then be reported as a separate account on your . Collection accounts have a significant negative impact on your credit scores.

Collections can appear from unsecured accounts, such as and personal loans. In contrast, secured loans such as mortgages or auto loans that default would involve foreclosure and repossession, respectively. Auto loans can end up in collections also, even if they are repossessed. The amount they are sold for at auction may be less than the full amount owed, and the remaining amount can still be sent to collections.

Collections can be removed from credit reports in only two ways:

  • If the collection information is valid, you must wait 7 years from the original delinquency date for the information to cycle off your credit reports. The original delinquency date is the date the account first became delinquent and after which it was never again brought current.
  • If collection information is inaccurate, you can file a dispute on the collection information in your credit report. Depending on what the inaccuracy is, the collection account may be updated rather than removed. Learn more on how to dispute credit report information.
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    Which Jurisdiction Is My Credit Card Debt Subject To

    While you should speak with a paralegal or lawyer about specific questions, the jurisdiction determines the statute of limitations.

    In most cases, it will fall under the jurisdiction where you signed the credit application or credit card agreement. However, in some cases, it could be in the state where you live now. Each of the 50 states and the District of Colombia has its own laws.

    Debt collectors will typically attempt to move the venue to the place where they have more time to collect the money they say you owe. However, that doesnt mean they will be allowed to do so. Its up to you to make a compelling argument as to why a different states statute of limitations should be used.

    Understanding Floridas Statute Of Limitations

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    Floridas statute of limitations limits the amount of time a creditor or debt collector can sue you to collect a specific type of debt. Once a debt is past the statute of limitations, it becomes time-barred. However, creditors still may attempt to collect on time-barred debts, including filing a lawsuit.

    If a creditor does attempt to take legal action to collect a debt after the statute of limitations has passed, you have the right to ask for the case to be dismissed in court. You will need proof of the date of your debt as well as proof that the statute of limitation has passed, however, so make sure to do some research and keep accurate records, if you can.

    Florida Statute of Limitations on Debt
    Mortgage debt
    Generally 5 years

    If a debt has already expired, its generally best to leave it alone. A debt collector can no longer successfully sue you for debts that are time-barred and if they try, you can present the statute of limitations as your defense in any lawsuit.

    Also note that if you do make a payment on a time-barred debt, you will effectively restart the clock. In that case, the debt collector can once again sue you for repayment of your debt as if the debt were new. They can even sue you for interest and fees that have accumulated along the way, which means you could owe a lot more than you realize. This is yet another reason its best to let go of old debts so you can focus on steps that can improve your financial life.

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    Wait Until It Falls Off

    When the debt in question is legitimate and you cant convince the debt collector to delete it from your report, your only remaining option is to wait. After seven years from the date the account first became delinquent, the collection should fall off of your credit report.

    Although this means the collection will continue to impact your credit score its impact will lessen as time passes.

    Know Your Rights And Avoid Unnecessary Payments

    Here is what you should take away from this article at the end of the day:

    If you are in debt to a collection agency or to a creditor and you signed a legal document promising to repay, and the nonpayment or delinquency of that agreement has shown up on your credit report, it does not mean you still have a legal obligation to repay that debt.

    Repaying time-barred debt will actually hurt you in terms of your vulnerability to lawsuits.

    Even if the debt is still listed on your credit report, make sure you confirm the statute of limitations before agreeing to make any payment or admitting to owing the debt.

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    Are You Worried Department Of Revenue Child Support

    Department Of Revenue Child Support – Florida is operating as a debt collection company. If youre confused by a collection listing on your credit report, make sure you attempt to verify the debt with the collection agency. If youre wondering if your rights have been violated under the Fair Debt Collection Practices Act , contact your state Attorney Generals office, the Federal Trade Commission , the Consumer Financial Protection Bureau or a local attorney.

    Verifying The Statute Of Limitations

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    While trying to file a lawsuit against a borrower after the statute of limitations has expired is not a prohibited practice, it is likely to get thrown out of court. The courts, however, dont keep information tracking different debts and their statutes of limitations. Verifying that the statute of limitations has run out on a debt then falls to the borrower.

    To do this, the borrower must gather as much information as possible about their debt. This could include bank statements, receipts, and any documents created when they first obtained the loan. These will show when the loan was granted and the last time the debtor made a payment or acknowledged the debt.

    When a borrower can show that the statute of limitations has expired on their debt, its possible to use this as a debt defense in court. The court will simply throw the case out, and the borrower will not have to go through litigation for the creditor to recover the debt.

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