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In Florida, the statute of limitations for debt collection lawsuits is generally 4 to 5 years, depending on the type of debt:
Once the statute expires, the debt becomes "time-barred", meaning creditors cannot sue to collect. However, actions like making a payment or acknowledging the debt in writing can restart the clock.
Judgments obtained within the statute of limitations are enforceable for 20 years, allowing creditors more time to collect. Debtors must actively raise the statute of limitations as a defense in court; otherwise, creditors may still secure a judgment.
Collectors must comply with federal and state laws when dealing with time-barred debts, avoiding deceptive practices or threats of legal action for expired debts. Violations can result in fines and damages.
Understanding these timelines is key for managing debts or trading debt portfolios in Florida.
The statute of limitations sets a legal deadline for creditors to file lawsuits to collect debts. It serves a dual purpose: encouraging creditors to act promptly while evidence is still available and protecting debtors from facing lawsuits indefinitely.
In Florida, this isn't an automatic safeguard. To benefit from it, debtors must actively raise the statute of limitations as a defense in their formal response to a lawsuit. Courts won't dismiss cases based on expired deadlines unless the debtor specifically invokes this protection.
Once the statute of limitations expires, the debt becomes "time-barred", meaning creditors can no longer enforce it through legal action. This rule impacts both debt collectors and debtors, especially when assessing the value of debt portfolios. Florida Statute § 95.11 outlines the specific timeframes for different types of debts.
Florida Statute § 95.11 provides clear timelines for various debts, starting from the date of the first missed payment or the final act that created the claim. Here’s how it breaks down:
If a creditor secures a court judgment, the situation changes. Under § 95.11(1), judgments remain enforceable for 20 years, giving creditors extended time to collect as long as they act within the initial statute of limitations.
Florida Debt Collection Statute of Limitations by Debt Type
In Florida, the time limits for collecting different types of debts vary significantly - spanning from 1 to 20 years. These deadlines impact both creditors and debtors, influencing how debts are pursued and managed.
Credit card debt is an area requiring close attention to documentation. Typically, credit card agreements fall under written contracts, which have a 5-year limitation period. However, if a debt buyer cannot produce the original signed agreement, the court may classify the debt as an "open account", reducing the limitation period to 4 years.
"Without the physical contract, Florida courts may classify the debt as an 'Open Account' rather than a 'Written Contract.' This reduces the Statute of Limitations from 5 years down to 4 years." - Alper Law
This classification can significantly influence how debts are valued and traded within portfolios.
Auto loans, as written contracts, come with a 5-year limitation period under § 95.112.
Medical debt tied to licensed facilities has a shorter limitation period of 3 years, starting from the moment it is referred to collections.
Deficiency judgments arising from residential foreclosures carry the shortest limitation period - just 1 year - according to § 95.116.
| Debt Type | Limitation Period | Florida Statute Reference |
|---|---|---|
| Domestic Judgment | 20 Years | § 95.11 |
| Written Contract / Promissory Note | 5 Years | § 95.112 |
| Mortgage Foreclosure | 5 Years | § 95.112 |
| Auto Loans | 5 Years | § 95.112 |
| Credit Card Debt (with contract) | 5 Years | § 95.112 |
| Credit Card Debt (no contract) | 4 Years | § 95.119 |
| Oral Agreement | 4 Years | § 95.119 |
| Open Account (Store Credit) | 4 Years | § 95.119 |
| Medical Debt (Licensed Facility) | 3 Years | § 95.11 |
| Deficiency Judgment (Residential) | 1 Year | § 95.116 |
Understanding these timeframes is crucial for determining when the clock starts ticking on a debt and how certain actions might reset or extend the statute of limitations. Up next, we’ll dive into the specifics of when these deadlines begin and what events can restart the clock.
The statute of limitations clock typically starts ticking on the date of default, which is usually when a payment is first missed. In Florida, this applies to most consumer debts, with the countdown beginning either when the first payment is missed or when the liability was initially incurred - whichever happens later.
"The Florida statute of limitations for consumer debt begins to run on the date that a payment is missed or when you first incurred the liability, whichever occurred later."
- Paul A. Humbert, Creditor's Rights Attorney
For revolving credit accounts like credit cards, each billing cycle may have its own statute of limitations period, rather than a single timeline for the entire balance. In the case of demand notes without a specified maturity date, the clock starts when the first written demand for payment is made. These rules create varying timelines across different debt types, shaping how limitations periods are applied.
Certain actions can completely reset the statute of limitations, even if the debt is close to being time-barred. For instance, making a partial payment resets the clock, starting the limitation period anew from the date of that payment.
"If a debt is past the Statute of Limitations, it is 'dead.' However, making a payment of even $1.00 can legally 'revive' the entire debt and restart the 5-year clock from scratch."
- Jon Alper, Florida Asset Protection Attorney
A written acknowledgment - such as a signed statement from the debtor confirming the debt - can also revive the obligation, even after the original statute of limitations has expired. This acknowledgment gives collectors fresh enforceability. Similarly, entering into a new written agreement, like a settlement, structured payment plan, or refinancing deal, establishes a new contract with a fresh limitations period. However, verbal promises to pay do not reset the clock under Florida law.
Additionally, the statute of limitations can be paused, or "tolled", in certain situations. For example, if a debtor moves out of Florida to avoid creditors, the clock stops and resumes only when they return to the state. Legal actions, like filing a lawsuit, also pause the clock while the case is pending.
These reset and tolling events are critical for understanding the enforceability of debts. They play a significant role in determining the value of debt portfolios and influence strategies for buying, selling, and managing these assets.
In Florida, once the statute of limitations on a debt expires, it becomes "time-barred." This means creditors and debt collectors can no longer legally enforce the debt through court action. However, the debt itself doesn't disappear - it remains valid. To protect themselves, debtors must actively raise the statute of limitations as a defense in court. Without this defense, creditors might still secure a default judgment, even for a time-barred debt.
Florida law, along with the FDCPA (Fair Debt Collection Practices Act), FCCPA (Florida Consumer Collection Practices Act), and Florida Statute 559.72, prohibits debt collectors from threatening lawsuits or asserting rights they no longer have on time-barred debts.
"While trying to file a lawsuit against a borrower after the statute of limitations has expired is not a prohibited practice, it is likely to get thrown out of court."
- Matis Abarbanel, Founding Partner, Loan Lawyers
While collectors can't use the courts to enforce time-barred debts, they are still allowed to contact debtors by phone or mail to request payment. However, they must follow strict consumer protection laws during these interactions. Time-barred debts remain valid but cannot be enforced through legal proceedings.
Violating these rules can lead to serious consequences. Collectors may face statutory damages of up to $1,000, along with actual and punitive damages. They might also be required to cover the debtor's attorney fees. For unregistered debt collectors operating in Florida, administrative fines can reach up to $10,000. These legal risks highlight the importance of having clear internal policies, which we'll touch on next.
For debt portfolio managers, confirming whether a debt is time-barred is critical for both compliance and effective asset management. Start by reviewing the date of the last activity to determine if the debt falls within Florida's statute of limitations before pursuing any legal action.
When dealing with time-barred debts, focus on non-legal methods of collection while strictly adhering to the FDCPA and FCCPA. Avoid any mention of litigation, and follow all communication rules, such as refraining from calling debtors between 9 p.m. and 8 a.m., to steer clear of claims of deceptive practices. Keep detailed records of all communications and ensure your team fully understands the distinction between lawful contact and prohibited threats. Additionally, if a debtor is represented by an attorney, direct all communications to the attorney unless there’s no response within 30 days.
In Florida, debts that remain enforceable carry higher portfolio value because they allow for court-ordered tools like wage garnishments and bank levies. Once a debt becomes time-barred, these enforcement options disappear. However, collectors can still pursue non-judicial methods to recover what’s owed.
The quality of documentation can make or break a debt portfolio’s value. For example, the difference between a 5-year-old debt and a 4-year-old one can significantly impact its worth. When debt buyers acquire portfolios without original signed contracts - a frequent occurrence in bulk transactions - the lack of documentation can shorten the enforceability period and lower the portfolio’s value.
"Debt buyers (like Midland Funding or Portfolio Recovery) often buy debts in bulk spreadsheets and do not possess the original signed contracts. Without the physical contract, Florida courts may classify the debt as an 'Open Account' rather than a 'Written Contract.' This reduces the Statute of Limitations from 5 years down to 4 years."
- Jon Alper and Gideon Alper, Asset Protection Attorneys
The date of last activity is critical for portfolio evaluation. This single data point determines how much time remains for legal enforcement. Before purchasing a portfolio, buyers should confirm the date of last activity for each account. For instance, debts nearing 4.5 years old may hold little value for litigation if documentation is incomplete, but they could be valuable with full paperwork. Platforms like Debexpert offer analytics tools to help buyers assess compliance and calculate the remaining legal window, ensuring informed decisions.
Court judgments add significant value to portfolios. In Florida, judgments are enforceable for 20 years, far exceeding the 4-5 year timeframe for initial contracts. On top of that, these judgments accrue interest at approximately 5-6% quarterly, making them a more attractive asset.
Understanding these compliance nuances is key to making strategic decisions when trading time-barred debt.
Once compliance has been assessed, debt buyers must carefully navigate the market for time-barred debts. While these portfolios trade at steep discounts, they still hold some value. In Florida, the statute of limitations acts as an affirmative defense, meaning it only applies if the debtor raises it in court. If a debtor doesn’t respond to a lawsuit, courts can still issue valid judgments on expired debts, creating speculative opportunities for buyers willing to take on the risk.
Debt rehabilitation resets the clock. If a debtor makes a partial payment or provides written acknowledgment of the debt, the 5-year statute of limitations starts over. This strategy can turn unenforceable debts into actionable ones, though it must be done in compliance with consumer protection laws to avoid legal pitfalls.
"Florida's statute of limitations rewards creditors who act within the first two years. Every month of delay reduces both the legal options and the practical recovery rate."
Transparency is essential. Sellers should clearly mark which accounts are past the statute of limitations and provide accurate date-of-last-activity information. Buyers, on the other hand, must verify that sellers are registered with the Florida Office of Financial Regulation, as unregistered collectors can face fines of up to $10,000. Complete documentation is a win-win, allowing buyers to argue for the longer 5-year statute of limitations in court and justify higher prices for the portfolios.
For portfolios nearing the 4- or 5-year mark, immediate legal action can preserve collection rights. Filing lawsuits before the statute expires gives creditors the chance to settle afterward. Waiting too long, however, eliminates this option entirely. Commercial claims tend to have a 60-70% resolution rate within the first two years, but this rate drops sharply as debts age.
Trading Florida debt portfolios successfully hinges on understanding how the statute of limitations affects both value and risk. Buyers need to avoid accounts that are time-barred, while sellers should structure portfolios to secure the best pricing. The quality of documentation and acting promptly can be the difference between profit and loss. These strategies build on earlier compliance measures and focus on optimizing portfolios. By following these targeted approaches, buyers and sellers can better navigate Florida's legal landscape and unlock the full potential of their portfolios.
Proper documentation plays a dual role: it ensures enforceability and reduces trading risks.
Check the Date of Last Activity and original documentation right away.
The Date of Last Activity (DLA) - or the date of the first missed payment - determines whether a debt is still legally enforceable. Make sure each account's DLA aligns with your trading strategy. Accounts without original contracts may fall under Florida's 4-year "Open Account" limitation, while those with contracts might qualify for a 5-year window. If you're buying portfolios sold as electronic data without physical contracts, value them based on the 4-year limitation rather than assuming the 5-year period applies. High-quality documentation is critical in cases with missing information to safeguard portfolio value.
Focus on portfolios with judgments.
In Florida, a court judgment extends the enforceability of a debt to 20 years, far exceeding the original statute of limitations. When reviewing mixed portfolios, assess the percentage of accounts tied to judgments versus those still governed by their original documentation timelines.
Ensure registration compliance throughout the collection chain.
Verify that all sellers and previous collectors are registered with the Florida Office of Financial Regulation. Non-registration can lead to fines of up to $10,000, creating compliance risks and reducing the portfolio's overall value.
While buyers aim to manage risks, sellers can boost portfolio value by focusing on documentation and timely execution.
Organize portfolios based on original signed contracts.
Accounts with complete documentation, including signed contracts, qualify for the 5-year statute of limitations and can command higher prices. Accounts without such documentation should be marketed as subject to the 4-year "Open Account" limitation and priced accordingly.
Highlight rehabilitated debts.
Document any accounts that have received partial payments or written acknowledgments, as these actions can reset the statute of limitations. For instance, a debt approaching 4.5 years old that recently received a payment gains a fresh 5-year enforceability period. Highlighting these accounts in marketing materials can justify higher pricing.
Act before accounts hit the 4-year mark.
Commercial claims with proper documentation have resolution rates of 60–70% within the first two years, but these rates drop significantly as debts age. Taking action early not only preserves value but also improves marketability.
Clearly identify disputed accounts.
Florida's Consumer Collection Practices Act prohibits reporting disputed debts to credit agencies without noting the dispute. Label any accounts where debtors have challenged the amount owed to protect all parties involved and maintain trust in future transactions.
Florida's statute of limitations plays a key role in debt portfolio management, as the classification of a debt - whether it falls under a "Written Contract" with a 5-year limit or an "Open Account" with a 4-year limit - directly affects its valuation and enforceability. These legal timeframes not only shape collection strategies but also influence how portfolios are managed for maximum efficiency.
One important tactic is converting older debts into judgments before the statute of limitations expires, as this extends enforceability for up to 20 years. Even a small payment, such as $1.00, can reset the clock on an expired debt. These details create both opportunities and challenges, requiring swift and informed action.
The first two years are crucial for recovery, with commercial claims resolving 60-70% of the time during this window. Adding to the complexity, courts do not automatically enforce the statute of limitations. Instead, it must be raised as an affirmative defense by the debtor. Without this defense, collectors can still secure judgments on debts that are technically time-barred. For debt managers, acting decisively to secure judgments while debts are still enforceable is essential.
For both buyers and sellers of debt, understanding and strategically navigating Florida's statute of limitations is critical. Those who master these timelines stand to make more informed and profitable decisions.
The date of default usually refers to when you first missed a payment or when the debt was originally created. To find this date, review your account statements, payment history, or any communication from your creditor. This date matters because Florida’s statute of limitations - typically 5 years for most debts - begins counting from that point. Make sure to keep detailed records to verify this timeline for your debt.
In Florida, a debt collector cannot legally sue you for a time-barred debt. For most debts, the statute of limitations is five years. After this period, the debt is classified as time-barred, meaning it cannot be pursued through legal action.
That said, it’s crucial to know your rights and avoid any actions - like making a payment or acknowledging the debt - that could restart the statute of limitations clock.
In Florida, making even a small payment or agreeing to a settlement can restart the statute of limitations on a debt. This means that partial payments or acknowledging the debt could make it enforceable again, opening the door to renewed collection efforts. If the statute of limitations has already run out, be careful - any payment might reset the clock, giving creditors more time to pursue you.
More than a decade of Ivan's career has been dedicated to Finance, Banking and Digital Solutions. From these three areas, the idea of a fintech solution called Debepxert was born. He started his career in Big Four consulting and continued in the industry, working as a CFO for publicly traded and digital companies. Ivan came into the debt industry in 2019, when company Debexpert started its first operations. Over the past few years the company, following his lead, has become a technological leader in the US, opened its offices in 10 countries and achieved a record level of sales - 700 debt portfolios per year.
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