Florida Debt Collection Laws 

What are the debt collection laws in Florida? Do borrowers and creditors have rights and responsibilities? How long is the duration before a debt becomes uncollectible in Florida?

Lenders, debt collectors and borrowers in Florida have rights and obligations under state and federal law. These laws protect the parties’ interests and help maintain a sound credit industry. It’s essential to follow the regulatory guidelines to avoid adverse legal implications.

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What Are the Debt Collection Laws in Florida?

Florida has two primary laws regulating debt collection:

1. The Federal Debt Collection Practices Act

The Federal Debt Collection Practices Act (FDCPA) is a federal law that was enacted in 1978 to protect borrowers against abusive, deceptive and unfair debt collection practices. The FDCPA applies to third-party collectors and does not extend to creditors. Additionally, it only applies to consumer debts, such as personal, family and household loans. It excludes business debt.

Under the law, debt collectors are individuals or companies that regularly collect or attempt to collect debt. A company that collects its own debts using another name other than its own may also qualify as a debt collector. These include third-party debt collectors, debt collection agencies, collection attorneys acting as debt collectors and debt buyers.

2. The Florida Consumer Collection Practices Act

The Florida Consumer Collection Practices Act is a state law that protects debtors against unfair debt collection practices. It contains most of the FDCPA provisions but extends its scope. This act applies to original creditors and third-party debt collectors, unlike its federal counterpart.

This law requires debt collection agencies in Florida to be registered and renew their registration annually. However, this requirement excludes specific individuals and institutions, including the following:

1. Original creditors
2. Members of the Florida bar
3. Financial institutions authorized to do business in the state
4. Insurance and real estate professionals

In addition to the Florida Consumer Collection Practices Act, Florida state law includes the Florida Commercial Collection Practices Act. This law regulates commercial and business debt.

What Are the Rights of Borrowers in Florida?

Below are some critical rights of borrowers in Florida:

• Right to receive accurate loan information: Borrowers in Florida have the right to receive clear and accurate information about the terms of their loan, including the interest rate, repayment terms and fees.
• Right to receive written loan agreement: Borrowers are entitled to receive a copy of the loan agreement containing the terms of the transaction.
• Right to dispute inaccurate information: Borrowers can contest erroneous information on the loan documents or credit report.
• Right to fair treatment: Borrowers have the right to fair treatment without discrimination, regardless of gender, race, national origin or religion. Lenders must operate within the law when conducting risk assessments.
• Right to privacy: Borrowers have the right to privacy regarding their personal and financial information. Lenders must keep this information confidential according to the applicable privacy laws.
• Right to receive foreclosure protection: Borrowers have specified rights and protections in the event of foreclosure. Florida law provides specific requirements and procedures that lenders must follow before foreclosing a property, such as providing notice and opportunities for resolution.

What Are the Rights of Lenders in Florida?

A few examples of lender rights in Florida include:

• Right to verify borrower information: Creditors can access and verify information the borrower provides during the loan application process. This way, they can assess the borrower’s creditworthiness and make informed decisions.
• Right to receive timely payments: Lenders have the right to receive timely and complete payments from the borrower as agreed on, subject to the law.
• Right to enforce loan agreements: Lenders in Florida have the right to enforce the terms of loan agreements, including collecting payments and charging interest. Lenders may also sue to recover outstanding debts.
• Right to hire debt collectors or sell debt: Creditors can hire debt recovery professionals to improve their recovery efforts.

What Are Some Prohibited Unfair Collection Practices in Florida?

Florida’s debt collection laws prohibit debt collectors from abusive, deception and unfair debt practices, including the following:

1. Contacting debtors at inconvenient or unusual times, typically before 8 a.m. or after 9 p.m.
2. Contacting debtors at inconvenient or unusual places, such as the debtor’s place of work, if their employer forbids such communication.
3. Calling debtors repeatedly to annoy or harass them.
4. Using threats of harm or force to recover debts.
5. Using threats of legal action without the intention or legal right to do so.
6. Threatening to confiscate debtor’s assets unless they pay the debt.
7. Making false statements about their character, legal status or amount of debt.
8. Using profane or obscene language.
9. Releasing information to the public to coerce the debtor to pay the loan.

What Can Debt Collectors Do in Florida? 

Florida law allows debt collectors and lenders to take action to protect their interests:

• Garnishment: The court may give orders to allow lenders to take money directly from the debtor’s wages or third parties who owe the debtor money. These third parties may include employers and financial institutions.
• Property lien: The court may give orders allowing the lender to attach a lien to the debtor’s assets, including real estate. Lenders can sell the property to defray the debt owed.
• Asset freezing: Lenders can obtain a court order to freeze the debtor’s assets. However, if a creditor wants to freeze assets before judgment, the creditor must post a bond to compensate the borrower in case the latter prevails in civil litigation.

What Can Borrowers Do When Debt Collectors Break the Law? 

Florida law allows borrowers to sue to recover damages if debt collectors violate their rights under the debt collection laws. Borrowers can also file a complaint with the Federal Consumer Financial Protection Bureau and the Florida Office of Financial Regulation.

What Is the Statute of Limitations for Debts in Florida?

The limitation period for debt recovery in Florida is five years for written contracts. For oral contracts, the limitation period is four years. If the lender obtains a judgment against the borrower, they must enforce it within 20 years. The limitation period starts when a missed payment is due or the date the liability occurred. It may restart if the borrower makes a new payment or executes a fresh contract to pay the outstanding amount.

Lenders may lose their right to sue borrowers to enforce the loan agreement when the limitation period passes. Although the lender may attempt to use non-judicial means to recover the debt once the limitation period passes, the debtor is under no legal obligation to comply. Lenders must act quickly if they intend to safeguard their interests.

Contact SWRS for Efficient Debt Recovery Solutions

Debt collectors, creditors and borrowers have rights and responsibilities under state and federal law. These laws are designed to protect the interests of the parties and preserve the sanctity of the credit industry. Although creditors can sue to enforce their rights, they must act quickly when dealing with debtors.

Southwest Recovery Services, LLC (SWRS) provides practical debt recovery solutions to creditors. We have multiple offices across the nation, including a location in Tampa. The professionals at SWRS have years of experience in the industry and deep knowledge of state and federal laws. Do you want to learn more about our offerings? Contact us now!