Debt can sneak up on you, especially if you live in Florida, where high utility rates, volatile industries, and recent recessions have forced many residents into debt. Floridians are often burdened by steep mortgage and student loan debt, which can lead them to rely on revolving credit for everyday expenses.
If you’re one of these Florida residents, you might be hoping for some debt relief, especially after the COVID pandemic led to record unemployment in this tourism-heavy state. Florida debt relief programs, including settlement and consolidation can be a way out. Avoid bankruptcy and empower yourself to build wealth in this amazing state: here’s what to know about debt relief in Florida.
Not all debt relief solutions are made alike, and we know that everyone’s financial situation is different. What works for one person may not work for you, and vice versa. If you’re burdened by debt and live in Florida, here are your options.
Debt settlement is what most people think of when they hear “debt relief” and generally involves an agency contacting your creditors to request settlements. Companies often would rather get partial payments than none at all. If the debt settlement company successfully negotiates on your behalf, you pay only a portion of what you owe and have your accounts closed.
This option is not for everyone! Your credit score will probably decline as the agency negotiates on your behalf. You likely won’t be able to open new accounts with those creditors. You also could end up accruing so much interest that your settlement amount isn’t that much lower than the cost of paying the debts normally. However, if you have a few key accounts that are already quite overdue, and you have some cash to settle the debts, this method could work for you.
Debt consolidation is just what it sounds like: you bring all your debts together so you can make one monthly payment instead of several. You’ll need to open a new line of credit to achieve this, usually a personal loan or debt consolidation loan. The problem is that your credit score needs to be fairly good to take out this loan — and you must commit to avoiding using your other accounts! Otherwise, you’ll end up with a personal loan as well as balances on your credit cards.
Debt consolidation programs are an excellent option for people who have good credit but are simply burdened by high interest costs or the complexity of paying multiple creditors.
Debt management is similar to debt consolidation, but you don’t have to open up a new line of credit. You work with a nonprofit agency that collects one monthly amount and remits payment to your creditors. Because you’ve enrolled in such a program, your creditors may reduce your interest rates. Your monthly payment amount is based on what you can afford.
If you’ve been struggling to budget for your credit payments, a debt management plan can provide you logistical help and interest rate relief. However, note that you will be required to close your accounts, which could cause a dip in your credit score. Still, debt management programs are a good way to ensure your creditors get paid and that your accounts are paid off and closed in good standing. This option is perfect if you’re aiming to go debt-free.
If none of the above options work for you, consider a personalized approach with a consumer debt counselor! They can guide you on questions such as:
Florida is a bit of a mixed bag when it comes to debt, with some types of debt being higher than others.
The average Floridian household debt is about $8,500. While that may not seem astronomical, it’s actually the 7th highest state average in the nation. Worse, Florida resident wages tend to be lower due to the service and tourism industry’s dominance. With a median income of just over $55,000 (the 14th lowest in the U.S.), Floridians often find themselves struggling to pay unsecured debts like their credit card bill, even if it’s not terribly high. If you have a lot of unsecured credit card debt, know that there are options available to you.
Florida has a relatively short statute of limitations for debt. For installment accounts such as personal loans, it’s 5 years, meaning that creditors cannot sue after that amount of time. For revolving credit e.g. credit cards, the statute of limitations is only 4 years. If you have been struggling to pay an old debt and the creditor attempts to sue you, know your rights! You may need a debt defense lawyer to help keep you from incurring more costs.
It’s important to note that even if a creditor cannot sue you for non-payment, the debt won’t be canceled. Generally, delinquent accounts are removed from your credit report after 7 years, no matter what the statute of limitations says. However, if a creditor has violated the statute to coerce you into payment or is threatening foreclosure, you may be able to regain control of your debt and recover some of your payments.
The housing market has improved, but many Florida homeowners have mortgage debt exceeding $180,000.
Florida has five of the 18 largest universities in the U.S. Many students remain in the state after graduation. While student loan debt is slightly lower than the national average, it’s still a daunting $25,000. Add in Florida’s high utility costs and rental rates, and many recent graduates have struggled to grow their wealth.
Because many of the state’s metropolitan areas essentially require cars, residents often have auto loans as well. While these accounts tend to be lower than mortgage or student loans, they can still present a burden, especially for unemployed or underemployed people. A car is crucial in most of Florida, so to avoid having your vehicle reclaimed or credit score impacted due to non-payment, consider a debt relief option.
With the aforementioned high utility rates and expanded costs of living, it’s all too easy to accumulate debt while living in Florida.
It depends on the program. Using a debt settlement agency typically has a negative impact on your score because you will stop making payments while your accounts are being negotiated. If you don’t plan to apply for a mortgage or auto loan soon, though, this can be a good option.
Debt management can also lower your score because your accounts will be closed. If you plan to live debt-free, this aligns with that goal.
Debt consolidation typically improves your score because you will have an installment account and several revolving accounts with low balances. However, you may not be able to achieve this method if your credit score isn’t already good.
In short, expect there to be some effects, but any of these methods can support your long-term path to financial stability and debt-free living!
Absolutely! Debt relief is not just one method, nor is one method right for everyone. Often, the best approach is to choose the right Florida debt relief option for each of your accounts. It’s important to evaluate whether an account is delinquent, has burdensome interest rates, or a combination thereof.
Florida has a unique economy that combines volatile industry trends with high education and living costs — yet the potential for good earnings at a decent cost of living. This means that even if you’re burdened by debt, there is a way out! Plus, with Florida’s short statute of limitations and rigid consumer protection laws, it’s easier to negotiate good terms and avoid predatory creditor tactics.
Don’t go it alone: TurboDebt is one of the best debt relief company in Florida thanks to our nuanced understanding and proven track record in debt negotiation. As noted above, a mix-and-match method can help you achieve both debt relief and your financial goals. Find debt relief in your state by contacting us today for your free debt relief consultation, and find out why we have more than 350 positive, five-star reviews on our Google My Business listing!