Most people don’t like to discuss divorce, but knowing these statistics and others about debt and financial infidelity can help you as you think about your finances, with a partner or without one. Check out the infographic below for more helpful numbers and facts.

Note: The information provided on CreditRepair.com does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only.

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If you have an old outstanding debt in Florida, you might be worried that your creditor or a collection agency will come after you. However, the statute of limitations plays a significant role in debt collection. In most cases, the maximum statute of limitations for Florida debt is five years, although some debts only have a statute of limitations of four. This means a creditor only has four to five years to sue you for the debt you owe. 

What is the statute of limitations?

A statute of limitations is a law that sets a maximum time during which a party can begin legal proceedings, such as a lawsuit, against another party. The statute of limitations typically starts from the day the event occurred. There’s a statute of limitations for various offenses, including failure to pay debts. Each state can set its own statute of limitations on debt collection lawsuits. 

Generally speaking, the statute of limitations exists because evidence and the likelihood of a strong case deteriorate as time goes on. The law doesn’t want to allow or reward people for inaction, so individuals are given a reasonable period when they can bring forward legal action. 

What does time-barred mean?

After the statute of limitations passes, debt becomes time-barred. When someone refers to “time-barred debt,” it means money was borrowed and never repaid but is no longer legally collectible because the statute of limitations has passed. 

What does tolled mean?

Tolled is also known as “extending the statute.” Debt can be tolled when a consumer takes an action that legally allows the statute of limitations to be extended.

For example, let’s say an individual ignores all communication attempts from their creditor and moves to another state because they know there’s only one year left before the statute of limitations is up. In this case, the creditor can take action to toll the debt, and if the person ever moves back, the creditor gets that year back on their statute. 

In some states, debt can be tolled if the borrower admits they know about the debt or makes a partial payment. For this reason, consumers must be cautious when dealing with creditors. 

Note that tolling a statute of limitations only applies to debts with a written contract, such as a loan or credit card agreement. 

How does the statute of limitations work with debt in collections?

If your debt is in collections, whoever currently owns the debt can file a lawsuit against you as long as the statute of limitations hasn’t passed. This means that even if your original creditor has written off the debt and passed it on to a collection agency, that agency can still take legal action within the allowable five-year statute. 

What if the statute of limitations has passed?

Once the statute of limitations has passed, a creditor can no longer take legal action against you. If they try to, you can file a motion to dismiss the case. The court won’t have your account records, so the responsibility will be on you to prove the statute of limitations has passed. Once you can show that, your case will be dismissed. 

Note that while the creditors can’t take legal action, they can still try to contact you for collection on the account, and it can still appear on your credit report. 

Be careful in engaging with your creditors, as you can accidentally reset or “toll” the statute of limitations. Don’t try to communicate with them about dropping the lawsuit, offering partial payments or acknowledging the debt, as this can have undesired consequences. 

What is the Florida law on the statute of limitations?

Florida has one of the lowest statutes of limitations for debt in the country. The majority of states have a statute of six years. In Florida, the statute of limitations for debts is:

• Five years for debts with a written contract, such as credit cards, medical debt or auto loan debt
• Four years for debts involving property (excluding foreclosure) 
• Four years for open-ended accounts 

The statute of limitations typically starts from the last activity on the account, whether that’s a payment, a charge or a credit. 

Note that the statute of limitations only applies to legal action for consumer debts in Florida. This means a collection agency or creditor can continue to attempt to collect on the debt even past the statute—they just can’t file a lawsuit. 

Additionally, in Florida, making a partial payment on a debt will toll the debt, resetting the statute of limitations. 

One important distinction is that if a judgment has been entered against you in court, the statute of limitations for Florida debt expands to 20 years and will continue to accrue interest until it’s paid. In some cases, creditors can have certain assets seized or wages garnished to recover what’s owed.

What debt falls under the statute of limitations?

The debts that fall under the statute of limitations include:

• Credit cards
• Personal loans
• Mortgages
• Auto loans
• Private student loans 
• Medical debt
• State tax debt

Some debts have no statute of limitations, including federal student loans and unpaid child support.

What should you do if you are being sued for old debt?

If you’re being sued for old debt in Florida, the first step is to figure out the date of the last activity on the account. Depending on the type of debt, you know you have a four- or five-year statute of limitations. If you feel confident that the statute of limitations has passed, don’t speak with the creditor and don’t make any payments. Instead, hire an attorney to review your case and file a motion to dismiss the lawsuit. 

On the other hand, if you’re being sued for an old debt but the statute of limitations hasn’t passed, you’ll need to come up with a plan. If the debt is accurate, the judge will likely side with the creditor. As a result, you might find that you receive a judgment, such as a wage garnishment or a lien put on your property. The total amount you’ll owe may cover the original debt, as well as any interest, fees and potentially attorney fees. 

It’s highly recommended that you show up to court and try to defend yourself, even if you know the debt is accurate. Showing up to court increases the chances the judge will give you a lighter penalty. 

What should you do if you have debt in collections that hasn’t passed the statute of limitations?

Let’s say you have debt in collections that hasn’t passed the statute of limitations but you haven’t been served a lawsuit, either. The important thing here is not to wait around and hope the creditor doesn’t take legal action against you. Instead, it’s essential to communicate with the creditor and try to rectify the situation. 

If the debt is accurate, you have a couple of options:

• If you have the cash available, offer a one-time lump-sum payment for less than you owe. In exchange for this payment, you’ll ask them to consider the debt settled, and you may even ask them to remove the debt from your credit report (pay for delete letter). If you pursue this option, get everything in writing so you have proof of the promises made. 
• If you don’t have the cash for a lump-sum payment, reach out and ask your creditor if you can set up a monthly payment plan. This can prevent you from being taken to court as long as the creditor agrees and you stick to your payments. Again, get everything in writing. 

If the debt is inaccurate, you’ll want to dispute to potentially have it removed from your credit report and stops impacting your credit score. You have the legal right to a fair and accurate credit report, and debt collectors can’t come after you for inaccurate debts.

It’s possible to file a dispute independently with the credit bureaus, but many people choose to get professional help in this area. For example, CreditRepair.com members saw over 8.2 million removals on their credit reports since 2012.

There’s no reason you have to do this alone—let our credit repair advocates help you today. 

Note: The information provided on CreditRepair.com does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only.

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Yes, a debt can technically be sent to collections without any notice. In some cases, you might not realize the debt is in collections until you check your credit report. Sometimes, you might not realize you owe the debt at all.

One common example of this is medical debts. There can be an assumption that you know you owe money based on what the insurance did and didn’t pay, and debts can be turned over to collections in some cases without a notice to you.

When a debt is sent to collections, it is being written off the books by the original creditor. It’s then reported as a collection account on your credit report, which is a serious negative mark on your credit history. You do still owe the money, though, and either the original creditor’s collection department or a third-party collector may try to collect the money from you.

What is the Fair Debt Collection Practices Act (FDCPA)?

The FDCPA is a federal law that requires debt collectors to adhere to standard, nonabusive practices. Its purpose is twofold: First, it’s designed to protect consumers from unfair or harassing debt collection practices. Second, it provides some protection for reputable debt collectors so they don’t have to compete with abusive competition. It’s important for you to know about the FDCPA so you can assert your rights when dealing with debt collectors.

Who can debt collectors contact?

Debt collectors can contact you about your debt unless you have notified them that an attorney is representing you. In that case, they are supposed to contact the attorney. Debt collectors can also contact other people but only to get your contact information, including your phone number, address and place of work. The FDCPA prohibits debt collectors from discussing your debt with those other people.

When can debt collectors contact you?

According to the Federal Trade Commission, debt collectors can’t contact you anytime they want. Some limitations are:

• They can’t call you before 8 a.m. in your time zone, unless you agree
• They can’t call you after 9 p.m. in your time zone, unless you agree
• They can’t call you at work if someone, including you, tells them you aren’t allowed to take calls there

What if you receive a letter from a debt collector?

First, check that the letter includes all the required information. The FDCPA spells out what a letter sent by a debt collector must say. The letter must:

• State that the letter is an attempt to collect a debt
• Give you 30 days to dispute the validity of the debt
• State the amount of money you owe
• Give you the name of the original creditor

If the letter does not contain this information, the collector could be in violation of the FDCPA.

If you don’t owe the debt . . .

Send the collection agency a letter disputing the validity of the debt within 30 days of receiving the letter. If you responded within 30 days and the company can’t send you proof of the debt, it must cease communications with you.

If the collector can’t prove the debt is yours, it obviously can’t be reported to the credit bureaus as belonging to you. If you find the collection account still listed on one of your credit reports, you can send a letter requesting its removal to the relevant credit bureau.

If you do owe the debt . . .

If you do owe the debt, you have a few options. First, if you can pay it off, do so as soon as possible. This might keep it from being reported to the credit bureaus.

Otherwise, you can try to work out a payment plan with the collection agency. Make sure you get this agreement in writing, though, so the agency doesn’t continue collection efforts against you.

If you can get the collection agency to agree to not report the item to the bureaus, that would be ideal. If the collection is reported, it can impact your score negatively for up to seven years.

Can you stop debt collectors from contacting you?

You can request that a debt collector stop contacting you. Send the request in writing and keep a copy for yourself. You may want to send it certified mail for good measure. Once the debt collector receives the letter, they legally must stop contacting you. However, you still do owe the debt.

Does paying a debt in collections remove it from your credit report?

No, paying a collection account doesn’t remove it from your credit report in most cases.

While you can ask the collection agency for a pay-for-delete agreement, this isn’t as common today as it once was. A pay-for-delete is when you agree to pay what you owe or most of it, and the collection agency agrees to delete the record from your credit report. Many collection agencies have contracts with the credit bureaus to provide correct information to ensure the accuracy of consumer credit reporting, though. Because of that, most won’t agree to a pay-for-delete arrangement.

But there may still be some benefit to paying a collection account—when you pay a collection account, the agency should report that to the credit bureau. The item will then show as a paid account rather than an unpaid collection account. Some credit scoring models view paid collections in a more favorable light than unpaid collections.

What can you do if an inaccurate collection is on your credit report?

If you find an inaccurate collection item on your credit report, you have a right to have it removed. The Fair Credit Reporting Act includes provisions to protect your right to a fair and accurate credit report. Gather any evidence you have about why the item is inaccurate and send a dispute letter to the credit bureau in question.

The credit bureaus are required to investigate, and if the collection agency can’t prove that the debt is legitimate and that it’s yours, the item should be removed. You can also work with a credit repair service such as CreditRepair.com if you want professionals to help you get inaccurate negative items removed.

Final tips for handling collection accounts

• Know that you have rights and understand what power collection agencies actually have.
• Check your credit reports regularly so you know as soon as possible about potentially negative items.
• Keep records of everything, including conversations with creditors and collection agencies and written documentation of agreements you make with them. You may need this documentation if the collection agency doesn’t hold up its side of an agreement.
• Consider working with an attorney or another professional if you’re facing a very aggressive collector, if you believe you don’t owe the amount or if you want to find a way to settle large debts in the most favorable way possible. You can also work with an attorney if a creditor has violated the law and you want to protect your rights.

CreditRepair.com helps people repair their credit when inaccurate negative items have tanked their score. Contact us to find out how we can help you work toward a clearer credit report if you have questionable collection accounts on yours.

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