Credit Card Debt Settlement & Negotiation in Florida

"I'd rather go to bed without supper than rise in debt." Ben Franklin

Franklin Debt Relief, LLC is a member of (TASC) The Association of Settlement Companies. This trade association has developed a standardized industry disclosure for consumers.

Debt Settlement in Florida
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Florida Debt Settlement

(The author of this article is not a lawyer, nor should this article be substituted for legal advice by a practicing attorney. This is for educational purposes only, and before determining the legal remedies available for creditors, please rely only on the advice of a licensed Florida attorney about your situation. For legal advice, please contact a lawyer.)

Debt settlement, also known as debt negotiation or debt reduction, is a relatively new way for dealing with your debt problems. In a debt settlement program, by negotiating with a creditor, a client can reduce their debt by as much as 50 percent and be debt free in as little as 12 to 36 months.

Debt settlement is a great solution for consumers feeling overwhelmed with credit card debt that find themselves either falling behind on their payments or just barely able to afford the minimums. Considering the savings, in most cases it's worth doing if you find yourself in any of the aforementioned situations. As with any debt solution, however, there are potential downsides to debt settlement that should always be considered prior to enrollment. First, debt settlement may have an adverse impact on your credit. To put this point in perspective, however, it's important to remember the following: 1) any third party debt counseling program can potentially affect your credit negatively in the eyes of lenders, 2) the effect on your credit in the long-term is less severe, given the fact you'll be settling all your credit card debt (amount owed is 30 percent of your credit score, compared to credit history, which makes up 35 percent of your score) and 3) if you're falling behind or about to fall behind anyway, then your credit has been or will also be affected negatively.

Realistically, two of the main draw backs of debt settlement that are unique to debt settlement are the following: 1) the possibility of legal action being taken by the creditor to collect the full balance and 2) the likelihood that creditors will continue to call you until the debt is settled.

Thankfully, if you're doing debt settlement in Florida or even debt settlement in Texas these concerns are very much diminished. Why is Florida debt settlement so preferable compared to a lot of other states? The reason is Florida has highly favorable debtor laws that give consumers a lot of rights and protections when it comes to past due unsecured accounts like medical bills, credit cards, repossessions, and personal loans.

Florida Debt Settlement and Florida Collection Laws

Every state has laws that say if a collections agency is collecting a debt, they are legally obligated to stop contacting a consumer if the consumer sends a Cease and Desist letter and/or a Power of Attorney notifying the collection agency that a third party is responsible for handling all communications with the creditor. Florida law takes it a step farther and not only limits harassment from collection agencies, but also from the original creditor as well. In most states, when a consumer falls behind on their payments and the debt is still being collected by the original creditor (the bank that originally lent you the money or the hospital that serviced you, for example), then the creditor is reserved the right to call the debtor on a daily basis in order to collect whatever is owed, and although debt settlement companies servicing these clients may be able to reduce these calls somewhat, it is rare that the calls won't continue.

For Florida debtors who have fallen past due on their payments, there is more legal protection from harrassing phone calls because the same law that deals with what collections agencies can and cannot do when collecting a debt also pertains to the original creditor. (Since many calls are automated and much of the paperwork sent to credit card companies gets lost in the shuffle, please keep in mind that stopping phone calls, even with the debt collection protections afforded by Florida, is an unlikely achievement.)

Debt Settlment in Florida and Florida Homestead and Garnishment Laws

For some Florida debt settlement clients, their wages and home are completely protected, which gives the creditor even more incentive to settle. Given the fact that creditors have an incentive to settle even with past due debtors who reside in states who favor creditors, Florida debt settlement clients are in an even stronger negotiating position with their creditors.

Although many cases settle, some do in fact end up in court. After all, creditors are always reserved the right to sue debtors to collect a past due account, regardless of whether the consumer is taking any action to resolve the outstanding debt.

In the event a creditor sues a consumer in court and wins a judgment, they'll usually go about executing the judgment in one of the following ways:

1) Wage garnishment---contacting your employer and asking that they set aside a percentage of your wages every paycheck until the debt is paid back in full. (
2) Lien on your property---obligates you to pay back the creditor with any proceeds from the sale or refinancing of the property. A creditor can also force the sale of your property to recover any losses depending on the state.
3) Seizing your bank account---contacting your bank, showing the proof of judgment, and asking to freeze and withdraw any monies held in deposit under your name.

Fortunately, Florida laws protect "heads of household", or anyone that is the main provider for one or more dependents, from having their wages garnished (unless you authorized in writing to allow your creditor to garnish your wages or failed to file your Head of Household Exemption) and entitle Florida consumers to 100 percent homestead protection in the event of a lien (assuming you file your homestead exemption). (Note: this may not apply to tax liens, alimony, or contractor's liens. You should also review this information with an attorney licensed in Florida. Franklin Debt Relief recommends these articles for more information:

Florida Wage Garnishment) Any wages that are deposited in your bank account are also exempt for up to 6 months after you deposited them.

Florida Homestead Protection Articles In sum, these are major advantages for Florida debt settlement clients. Keep in mind that the vast majority of cases are settled successfully regardless of the legal advantages of the consumer. When you consider Florida state laws, debt settlement makes even more sense for the credit card companies, debt collection agencies, and most importantly, consumers. In the end, debt settlement in Florida is a great solution for consumers overwhelmed with medical bills, credit card debt, personal loans, and repossessions.

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