Debt Relief Options in Florida

Where do you go for help when you're in debt and live in Florida? In this article, you will read about your debt relief options and learn some of the rules and regulations that apply in Florida.

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Debt Statistics in Florida







Debt Relief Programs in Florida

Debt relief is available in Florida to those who feel overwhelmed by what they owe. Relief comes mainly via banks, credit unions, online lenders and debt-relief companies – (nonprofit and for-profit). All have people who specialize in offering help to solve the debt dilemma, especially credit card debt.

Five programs can address debt concerns, including debt management programs, debt consolidation loans, debt settlement, nonprofit debt settlement and bankruptcy. Each program has benefits that should be weighed against the negatives.

Here is a look at each program to help you determine what works best if you seek Florida debt relief:

Debt Management

debt management program can reduce credit card interest rates from 18%-30% to somewhere around 8%, thus reducing the monthly payment. The program aims to eliminate credit card debt in 3-5 years.

So, for example, if you had $5,000 in credit card debt and were paying 25% interest, your monthly interest rate would be $105. If you reduce the interest to 8%, the interest payment is just $33 a month. That’s a $72 savings that you could apply to reducing your debt and paying it off faster.

Debt management is not a loan. Credit score is not a factor in enrolling.  Participants can opt out of the program at any time. However, on-time payments must be made every month or the creditor can withdraw the interest rate concessions made to the consumer.

» Where to find it? – Debt management plans are offered by nonprofit credit counseling agencies, who work with creditors to reduce interest rates to a manageable level. The program covers unsecured debts, like credit cards, but not secured debts, like houses or cars.

» Is this right for you? – Anyone with high-interest credit card debt would be helped by this program. It not only lowers interest rates, it chips away at the amount owed until, in 3-5 years, you are free from the debt.

Debt Consolidation Loan

Debt consolidation loans combines unsecured debt – primarily credit cards – into one loan, typically at a lower interest rate than the loans that cause the problems.

The consumer makes a single payment to a single entity, at a lower interest rate. This saves money and simplifies payments. A debt consolidation loan in Florida is a good approach for those with a good credit score. Generally, lenders won’t offer their best  rates and/or terms to those whose credit score is below 670.

» Where to find it? – Most banks, credit unions and online lenders offer debt consolidation loans, provided you meet the credit score standards. It’s wise when searching to check for the lowest interest rate you can find.

» Is it right for you? – Anyone with a good credit score (670 or higher) and the discipline to stop using credit cards would be wise to consider this option. This is especially true for credit card debt. Generally, consolidation loans offer a lower interest rate than the onerous rates charged by card companies.

Debt Settlement

Debt settlement is an option in which a consumer pays less than what is owed, usually in a lump-sum payment. This may sound good, but it can be a long process and consumers must realize that it puts a damaging mark on their credit report for seven years.

The consumer, or more likely a company he/she hires, must negotiate a payment amount agreeable to both parties. In some cases, the consumer will pay half of what was originally owed. However, when fees and late payment penalties are factored in, the more accurate count is they pay about 25% less than what was originally owed.

The benefit to the credit card company is that it receives some money, as opposed to little or nothing if the consumer defaults.

The negative is that debt settlement will stain your credit report, and that will last seven years. Also, the IRS considers forgiven debt of more than $600 as income that must be declared on your tax return.

» Where to find it? – Debt settlement is offered by for-profit businesses who specialize in this service. They negotiate on your behalf with the credit card companies, who must agree to the plan before it goes forward. The process usually takes 2-3 years and card companies are under no obligation to accept settlement offers.

» Is this right for you? – Anyone who has reached the point of not making payments because the debt is so large. That tells a creditor their loan is at risk, so they may well be willing to take what they can get via a lump sum. Anyone who can’t afford the payment(s) and wants to avoid bankruptcy could consider debt settlement.

Nonprofit Debt Settlement

Nonprofit debt settlement is offered by a small number of nonprofit credit counseling agencies. Like debt settlement, it allows a consumer to pay less than what is owed, but there is no negotiating involved. Creditors agree in advance to accept 50%-60% of what is owed to resolve a debt.

The debt is repaid in 36 monthly installments.  If the consumer misses a payment, the program is canceled. Consumers can pay off the debt early, but there is no extending the payment schedule beyond 36 months.

The advantage of a nonprofit is that you pay 0% interest during the 36-month repayment period. Also, it is certified and accredited by the National Foundation for Credit Counseling (NFCC). Federal law requires the agency act in the best interest of the client.

» Where to find it? – The program started in 2021, so only a few nonprofit credit counseling agencies offer the program and only a few credit card companies and banks participate.  Consumers should search online using the term “nonprofit debt settlement” to find the companies that offer this program.

» Is this right for you? – This is a program for consumers who face overwhelming credit card bills, but don’t have the income to pay them off. You won’t have to pay any interest on the debt, as long as you keep up with the 36 monthly payments it takes to get through the program.


Bankruptcy is a last resort for those in debt, but for some it might be the best approach. Bankruptcy is painful, but it does give consumers a second chance to get their finances in order.  and it can be done without losing many of your possessions, including your home.

Florida had the second-most bankruptcy filings in the U.S. in Q1 of 2022.

There are two types of bankruptcy. In Chapter 7 bankruptcy, non-exempt assets are sold by a trustee appointed by the court and the money is used to pay off debt. Key assets are exempt from this process, notably your home, car, personal items needed for work, pensions and Social Security.

In Chapter 13 bankruptcy, you keep your assets in exchange for making regular payments to the trustee to pay down debt.

The consequences for bankruptcy are significant. Your credit score may drop 100-200 points, depending on where it was when you started. Bankruptcy stays on your credit report for 7-10 years, making it more difficult to get credit for a home or car loan in the future.

» Where to find it? – You must file for bankruptcy at a federal bankruptcy court. It’s always wise to consult an attorney when filing bankruptcy. He or she knows the ins and outs of the system and can protect you and your family as much as possible in the process.

» Is this right for you? – Take a look at your income and expenses. If you can’t figure out a way to pay off all your debts in five years, bankruptcy might be the best debt-relief option available.  It’s always best to try nonprofit counseling, settlement or consolidation before bankruptcy, but if those are not for you, bankruptcy lurks as the final resort.

Statute of Limitations in Florida

The statute of limitation for debt in the Sunshine State is five years. This means that a creditor has five years after your last payment to file a lawsuit against you for money owed. Once the five years has expired, a creditor has very little legal basis to a claim in court. The creditor can file after the statute of limitations has expired, they just can’t get a judgment against you – unless you or your attorney, doesn’t show up for the court date. That emphasizes the importance of a having a reputable and helpful attorney. The five-year timeframe starts with the date of the first missed payment.

Debt Collection Laws in Florida

The Florida Consumer Collection Practices Act (FCPPA) extends federal protections governing third-party collectors, like a debt collection agency, to the original creditors. The Florida Attorney General’s office states that a debt collector must send written notice with details on the debt within five days of contacting you. If you do not believe you owe the debt, you may write the collection agency within 30 days of being contacted saying you do not owe the bill and the agency must stop contacting you unless they have written proof of the debt, like a copy of the bill.

More Debt Statistics in Florida

Floridians were hit hard by the COVID-19 pandemic. In 2021, the state ranked second in the country in both bankruptcy filings (13,595) and foreclosures (2,971).

Here’s a mixed bag of other debt and economic statistics about the state:

  • Unemployment: The unemployment rate had dropped to 4.5% by the end of 2021, below the national average of 5.2%. That gives hope that perhaps the bankruptcy and foreclosures will slow.
  • Credit Cards: Floridians like to use their credit cards. The average credit card debt in the state in 2021 $5,623, a nearly $1,500 drop from six months prior.
  • Credit Score: The average FICO credit score nationally has risen to 716. That puts Florida’s average of 701 in perspective, but does not diminish that Floridians generally have strong credit ratings.
  • Mortgage Debt: Excluding the mortgage, Floridians owe an average of $49,000 in household debt.
  • Identity theft: In 2020, Florida ranked 11thin the nation in identity theft, with 101,367 reports. That number should be balanced by the fact that Florida is the fourth most populous state. Florida has 472 reports per 100,000 people; Illinois, Kansas and Rhode Island all top 1,000 per 100,000.

About The Author

Bill Fay

Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it in 2012, helping birth into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering the high finance world of college and professional sports for major publications, including the Associated Press, New York Times and Sports Illustrated. His interest in sports has waned some, but he is as passionate as ever about not reaching for his wallet. Bill can be reached at [email protected].


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