Credit Card Lawsuit Lawsuit News

November 10, 2012

Credit Card Default in Florida

Federal law sets a floor or minimum – states may choose to offer more protection, but they may not offer less. Florida has its own law regulating consumer collections, but it doesn't add to the federal protections – it merely restates them.

Even if you don't want to review those laws right now, you should know that they are process protections. That means they regulate the mechanics of debt collection: how debt collectors can communicate with you; when and where they call you; what they can say to third parties, like family or your boss; what your rights are in making sure it's a valid debt; and what they legally can and can't say.

But these laws in no way keep your credit card company from trying to collect a debt or from suing you, and they don't wipe out debt or reduce the amount you owe. They simply lay out the rules your credit card company has to follow.

On the plus side for Florida residents, you get some added benefit from the state's courts, which seem to be strict in applying the federal rules. For example, district courts in the southern district of Florida make it easy to win against and recover from debt collectorswho violate the Fair Debt Collections Practice Act.
If Your Credit Card Issuer Is Going to Sue, They Have Only 4 Years

A statute of limitations is a fancy term for "time limit to sue." The statute of limitations for credit card actions in Florida is four years – if your credit card company doesn't file by then, they can't sue. For more information, you can review Florida lawsand lawsuits on credit cards. When you're reviewing state law, keep in mind credit cards are considered "store accounts" in Florida, not a written contract.
Wage Garnishment – Your Creditor and Your Employer Can Both Collect

Generally speaking, Florida lawfollows the federal guidelinesof allowing creditors to garnish 25 percent of your wages, if they win a judgment against you in court. But there is a major exception in Florida – if you are the head of a household and provide for a childor other dependent, your income is exempt from garnishment.

Florida is fairly liberal in who it considers to be a "head of household" for purposes of exempting wages from garnishment. For example, an unmarried biological fathercan be the head of a household if he acknowledges a child and voluntarily provides financial support. You can even be the head of a household if you take care of an individual you're not related to – as long as they live in the same home.

There are also certain kinds of income that are exempt, such as Social Security, workers compensation and unemployment.

One side note: While providing a generous head of household exemption, if your wages are garnished, you may have to pay your boss, too. In Florida, your employer is paid when your salary is garnished.

Your employer may collect $5 from you for the first time they forward part of your salary to your creditor, and $2 from you every time after that, for the "administrative costs" of garnishing your salary.
If You Have to Declare Bankruptcy, Some of Your Property Is Exempt

If you're not able to pay your credit card bills, you may be considering bankruptcy. The idea behind bankruptcy is to give the debtor a fresh start, while paying creditors as much as reasonably possible. With that in mind, Florida exempts, or protects, some of your property from bankruptcy to make sure you have enough to start over.

Florida's exemptions are fairly generous– it's a good state for declaring bankruptcy. For example, you may use a "homestead" exemption to protect a home of any value – much more generous than most states. State pensions, disability benefits, unemployment compensation, worker's compensation, Social Security and veterans benefits are all protected. Alimony and child support are both protected, and so is the property of a business partnership. Personal property up to $1,000, or $2,000 for a couple, and a motor vehicle valued up to $1,000 are also protected.

As is often the case, these exemptions or protections are scattered throughout the state's law, and even the state constitution.





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