Consumer Debt Collection
Attorney in Florida.

Consumer accounts are collected under rules that reach every letter and every call, and a violation costs the creditor more than the debt. Consumer collection is the recovery of individual accounts within those rules, in a way your members and customers will not resent, and your regulators will not notice.

Compliant recovery of consumer accounts under the FDCPA and FCCPA

The person who owes you is also, or was, your customer. A member of your credit union. A patient. Someone who financed a car through your dealership or carried a balance on your store card. That changes the math. The account has to be collected, but not at the cost of a complaint to a regulator, a countersuit under a consumer statute, or a review that says your institution treats people badly when they fall behind. Consumer collection is the work of getting paid without paying that price.

What consumer collection is

A consumer debt is one an individual incurred for personal, family, or household purposes: an auto loan, a credit card, a medical bill, a retail account, a personal line of credit, the deficiency left after a repossession. Collecting it is governed by two statutes that reach almost everything a collector does. The federal Fair Debt Collection Practices Act applies to third-party collectors, including law firms that regularly collect consumer debts. The Florida Consumer Collection Practices Act goes further: it applies to original creditors too, and it prohibits, among other things, contacting a debtor between 9 p.m. and 8 a.m., contacting a debtor who is represented by counsel, communicating with the debtor's employer before judgment, and claiming a right that does not exist, such as threatening a suit that will not be filed. Both statutes give the debtor a private right of action, with statutory damages and attorney's fees.

Within those rules, the process is the one used for any debt: a written demand that includes the validation information federal rules require, an opportunity for the debtor to dispute or resolve, suit in county court where the account does not resolve, and enforcement of the judgment through the tools Florida allows against an individual, which are narrower than the tools available against a business.

Why this matters to your institution

The recovery on a consumer account is usually modest. The exposure from collecting it badly is not. A single letter that misstates the balance, a call to a debtor's workplace, a suit on a time-barred account, or a garnishment served without the notice Florida requires can produce a claim that exceeds the debt several times over, and those claims are filed by a bar of plaintiff's lawyers who look for exactly those mistakes. For a credit union or a community lender, the reputational cost of a public complaint can be larger still.

The other side of the ledger is that Florida law does give a creditor real remedies against an individual who can pay and will not. Wages can be garnished, subject to the head-of-family exemption. Bank accounts can be garnished. A vehicle above the exemption limit can be levied. A judgment lasts twenty years, which is long enough for a debtor's circumstances to change. The work is to use those tools where they fit, and to know when a debtor is judgment-proof and the account should be closed rather than pursued.

Just suppose

The following is an illustrative example, written to show how the process works. It is not a real client, a real matter, or a promise of any result.

Imagine you are the collections manager at a community credit union in St. Petersburg. Your indirect auto-lending program has produced a batch of deficiency balances: members who defaulted, whose vehicles were repossessed and sold, and who still owe the difference, typically $6,000 to $14,000. Your internal collectors have made the calls the law allows. Some members have set up payment plans. Others have gone silent. Your board wants the balances recovered, and your compliance officer wants no letters from the state attorney general.

The firm you engage begins by reviewing each file for what a deficiency suit requires under Florida's Uniform Commercial Code: proof that the member received the required notice before the sale, and that the sale was commercially reasonable. Two files are missing the notice; they are returned to you with a recommendation not to pursue, because a deficiency suit without the notice invites a counterclaim. On the remaining accounts, a demand goes out with the validation disclosures. Several members respond and settle, in part because the letter is polite and accurate and offers a payment plan.

The silent accounts are sued in Pinellas County. Most default. Judgments are entered and recorded. For each member, the firm determines whether he or she is a head of family; where a member is, wage garnishment is limited and the firm looks instead to a bank account or waits. Where a member is not, a continuing writ of garnishment goes to the employer, with the notice and exemption form Florida requires served on the member. Over the following year, most of the balances are recovered through modest wage deductions. No member files a complaint, because at no point was there anything to complain about.

How consumer collection works in Florida

Every consumer file is reviewed for the statute of limitations, for bankruptcy, for whether the debtor is represented, and for the documentation the account requires, before any contact is made. Demands are compliant on their face. Communications are logged. Suit is filed only on accounts that support it, in the county where the debtor lives. After judgment, enforcement is matched to the debtor's circumstances and to Florida's exemptions, which protect the homestead, most of a head of family's wages, and modest amounts of personal property and one vehicle.

Where a debtor cannot pay, we say so, so the account can be closed and the reserve released. Where a debtor can pay and has chosen not to, the tools are used, correctly, until the account is paid.

Common questions

Does the Florida Consumer Collection Practices Act apply to my institution directly?

Yes. Unlike the federal act, Florida's statute applies to original creditors collecting their own accounts, not only to third-party collectors. Your internal collection practices are subject to it.

Can wages be garnished in Florida?

Yes, with limits. Federal law caps garnishment at 25 percent of disposable earnings, and Florida exempts the wages of a head of family entirely unless they exceed $750 a week and the debtor agreed in writing to the garnishment. Determining head-of-family status is the first step.

How old is too old?

Generally five years from the last payment on a written agreement, four on an open account. Suing, or threatening to sue, on a time-barred consumer account violates the collection statutes.

Will you treat our members the way we would?

That is the standard. Every communication is one you could read aloud at a board meeting.

The discipline behind the result

Consumer collection is done correctly or it is not worth doing. We collect within the statutes, document as we go, and use Florida's enforcement tools where they fit, so the balance is recovered and your name stays clean. Call (813) 288-1881.