But if you don't cancel the purchase by the deadline and eventually stop making payments on your timeshare, you could lose the timeshare to a foreclosure or repossession, depending on what kind of timeshare you own. (While a developer may foreclose a deeded timeshare, a right-to-use timeshare is typically repossessed, which is a different legal process than a foreclosure.)
Also, should you decide to try to sell your timeshare, Florida law protects you against resale scams.
If you buy a Florida timeshare, you can cancel the timeshare contract up until midnight on the 10th calendar day after the later of:
Under Florida law, this right of cancellation can't be waived. If a purchaser waives, knowingly or unknowingly, their right of cancellation and a closing occurs, the closing is voidable at the purchaser's option for up to one year after the date when the cancellation period would have expired. (Fla. Stat. § 721.10(2)).
Also, a closing can't happen until the purchaser's cancellation period has expired, and if a closing occurs before the cancellation period's expiration, the closing is voidable at the purchaser's option for up to five years after the closing. (Fla. Stat. § 721.10(2)).
To cancel the purchase contract, you must notify the seller in writing. Then, the timeshare company must refund you the total amount of payments, reduced by the value of any benefits received, within:
In Florida, the developer must furnish each timeshare purchaser with a copy of the public offering statement. (Fla. Stat. § 721.07(6)(a)).
A "public offering statement" is a very detailed history of the project that contains important matters to consider when buying a timeshare interest, including, among other things:
If you take out a loan to purchase an interest in a deeded timeshare and fail to make your timeshare mortgage payments or keep up with the assessments, you might face a foreclosure.
In Florida, residential foreclosures are judicial, but state law provides for the nonjudicial foreclosure of mortgages and assessment liens for timeshare properties. (Fla. Stat. § 721.855 and § 721.856).
In a foreclosure, the borrower's total debt sometimes exceeds the foreclosure sale price. The difference between the sale price and the total debt is called a "deficiency."
For example, say you take out a mortgage loan to buy a timeshare in Orlando, Florida. The total amount you owe on the timeshare loan is $15,000, but the timeshare sells for $10,000 at a foreclosure sale after you stop making the required mortgage payments. The deficiency is $5,000.
In some states, the lender may get a deficiency judgment (a personal judgment) against the borrower for the deficiency amount. Whether you'll face a deficiency judgment after a timeshare foreclosure depends on state law.
In Florida, if you don't object to the foreclosure process, the lender can't get a deficiency judgment against you after a nonjudicial timeshare foreclosure. (Fla. Stat. § 721.81(7) and § 721.855(5)).
A few of the various options to avoid a timeshare foreclosure include:
However, be aware that once you own a timeshare, you'll probably have trouble disposing of it. Many of these alternatives, like selling or donating the timeshare or completing a deedback, are very difficult to complete or are at the option of the developer. You'll probably have better luck working out a settlement with the timeshare developer.
Owners often find it extremely difficult to sell their timeshares. So, scammers sometimes mislead timeshare owners into thinking that their company has someone waiting in the wings to buy the timeshare. But there’s a catch—the timeshare owner must pay hundreds or thousands of dollars in upfront fees.
Once the fees are paid, the scam artists claim that they were simply offering advertising services for the upfront money paid, and no buyer ever materializes. Or the scammers disappear with the money.
In another common scam, the supposed reseller might not ask for an upfront fee, but you'll have to pay various fees, like a "federal tax," "state tax," "insurance premiums," "gains taxes," "customs fees," or something similar—but bogus—before the deal can happen. You keep paying the fees, but the sale doesn't happen.
Florida law provides the following protections to shield consumers from this type of resale scam.
If you want more information about timeshare laws in your state or need assistance canceling a timeshare, consider talking to a real estate attorney.
Contact a foreclosure attorney if you're facing a timeshare foreclosure and have questions about the process or your options.
]]>In most cases, a creditor can't garnish your wages without first getting a money judgment from a court. For instance, if you're behind on credit card payments or owe a doctor's bill, those creditors can't garnish your wages unless they sue you and get a judgment. Some creditors, however, like those you owe taxes, federal student loans, child support, or alimony, don't have to file a suit to get a wage garnishment. These creditors have a statutory right to take money directly out of your paycheck.
Florida's wage garnishment laws generally follow the federal wage garnishment laws. But some exemptions are available in Florida that might limit a creditor's rights to garnish your wages. For the most part, creditors with judgments can take up to 25% of your wages and only if your wages meet a minimum threshold. However, for a few types of debts, creditors can take more.
Generally, any of your creditors might be able to garnish your wages. Again, some creditors must first get a judgment and court order before garnishing wages. Other creditors don't need a court order.
The most common types of debt that may be garnished from your wages include:
Under federal law, the garnishment amount judgment creditors can take is limited to 25% of your disposable earnings for that week (what's left after mandatory deductions) or the amount by which your disposable earnings for that week exceed 30 times the federal minimum hourly wage, whichever is less. (15 U.S.C. § 1673).
Florida's wage garnishment laws are the same as federal law, with some added protection if you qualify for a head of family exemption.
Florida's wage garnishment laws are located in Title XV, Chapter 222, and Title VI, Chapter 77 of the Florida Statutes.
Again, federal law limits how much money can be garnished from your paycheck. The idea is that you should have enough left to pay for living expenses. Florida hasn't imposed stricter limits, so federal law governs in Florida. Here are the rules.
A creditor can garnish 25% of your disposable income or the amount by which your disposable income exceeds 30 times the federal minimum wage, whichever is less. In Florida, if your disposable income is less than 30 times the federal minimum wage, your wages can't be garnished at all. (Fla. Stat. § 222.11).
Florida law allows employers to charge you for complying with wage garnishment orders and to deduct these charges from your paycheck.
If you are head of the family and your wages are $750 per week or less, your wages can't be garnished by a judgment creditor if you claim the head of family exemption. Disposable earnings of a head of a family, which are greater than $750 a week, may not be attached or garnished unless you agree in writing. To qualify as head of family, you must provide more than one-half of the support for a child or other dependent. (Fla. Stat. § 222.11).
So, there really are no dollar limits to Florida’s head of family exemption if you qualify as a head of family and don't waive the exemption. In this situation, you may exempt an unlimited amount of your earnings from garnishment. However, waivers are sometimes included as part of a promissory note or consumer debt contract.
Also, this exemption isn’t automatic; you must claim it by responding to the judgment creditor’s wage garnishment writ when you’re notified about the wage garnishment. If you don't file your claim of exemption form by the deadline, you'll probably lose the exemption. A lawyer can help you fill out the form and ensure you file it on time.
The garnishment process often starts after a creditor gets a judgment in court against a debtor. If a creditor gets a judgment against you, the court will send a notice of a wage garnishment to you and to your employer. The notice tells your employer they must withhold a specific amount of your wages.
The garnishment documents that you received from the court should contain instructions on what you must do to object to the garnishment by claiming exemptions. You must file any exemptions to the garnishment within 20 days of receiving the notice. Also, the creditor must send you a notice of the garnishment within five business days of the issuance of the writ of garnishment or within three business days after the writ is served on you, whichever is later. (Fla. Stat. § 77.041).
You also might be able to object if the wage garnishment was made in error or the creditor failed to follow the law or comply with legal procedures. A garnishment lawyer can help you identify any mistakes and object to the garnishment.
If you don't object or if your objection fails, your employer will start taking money out of your paycheck and sending it to the garnishing creditor.
Creditors who have obtained a court judgment against an individual for unpaid debts can garnish your wages. These garnishments commonly apply to creditors like credit card companies, medical providers, or banks that provide personal loans. Also, you might face a wage garnishment as the result of a court-ordered obligation, like child support or alimony.
In addition, the federal government can garnish wages for outstanding federal debts, including unpaid taxes or defaulted federal student loans. Agencies, including the Internal Revenue Service (IRS) and the U.S. Department of Education, can start wage garnishment proceedings after giving due notice and an opportunity to resolve the debt. However, there are limitations on the percentage of disposable income that can be garnished (see below).
In addition to wage garnishment, another way to garnish money is by levying a bank account, subject to some exemptions. Certain money in your bank account is protected from this type of garnishment, for example, two months' worth of certain federal benefits, such as Social Security. So, credit card companies, medical services providers, and other commercial creditors generally can't garnish Social Security and other federal benefits.
However, the federal government can garnish some kinds of federal benefits, such as Social Security and Social Security Disability Insurance (SSDI), to recover some debts, like back taxes or defaulted student loan payments.
In Florida, earnings exempt under the head of family exemption, which you deposited in your bank, are also exempt from garnishment for six months after the deposit date if the funds can be traced and properly identified as earnings. (Commingling of earnings with other funds doesn't by itself defeat the ability of a head of family to trace earnings.) (Fla. Stat. § 222.11).
If you owe child support, federal student loans, or taxes, the government or creditor can garnish your wages without getting a court judgment. The amount that can be garnished is different, too.
Since 1988, all court orders for child support include an automatic income withholding order. The other parent can also get a wage garnishment order from the court if you fall behind in child support payments.
Federal law limits what can be taken from your paycheck for this type of wage garnishment. Up to 50% of your disposable earnings may be garnished to pay child support if you are currently supporting a spouse or a child who isn't the subject of the order. If you aren't supporting a spouse or child, up to 60% of your earnings may be taken. An additional five percent may be garnished for support payments over 12 weeks in arrears. (15 U.S.C. § 1673).
If you are in default on a federal student loan, the U.S. Department of Education or any entity collecting for this agency can garnish your wages without first getting a court judgment, called an "administrative garnishment." The most that the Department of Education can garnish is 15% of your disposable income, but not more than 30 times the minimum wage. ((20 U.S.C. § 1095a(a)(1), 15 U.S.C. § 1673).
The federal government can garnish your wages if you owe back taxes, even without a court judgment. The amount it can garnish depends on how many dependents you have and your deduction rate. (26 U.S.C. § 6334(d)).
States and local governments may also be able to garnish your wages to collect unpaid state and local taxes. Contact your state labor department to find out more.
Under federal law, if you have more than one garnishment, the total amount garnishment amount is limited to 25%. (15 U.S.C. § 1673). For example, if the federal government is garnishing 15% of your income to repay defaulted student loans and your employer receives a second wage garnishment order, the employer can only take another 10% of your income to send to the second creditor.
Complying with wage garnishment orders can be a hassle for your employer, and some might be inclined to terminate your employment rather than comply with the order. State and federal law provide some protection for you in this situation.
Federal law prohibits your employer from discharging you if you have one wage garnishment but won’t protect you if you have more. (15 U.S.C. § 1674). A local attorney should be able to advise you about protections in Florida.
The creditor will continue to garnish your wages until the debt is paid off or you take some measure to stop the garnishment, such as claiming an exemption with the court. Your state's exemption laws determine the amount of income you'll be able to keep. Depending on your situation, you might be able to partially or fully keep your money.
You can also potentially stop most garnishments by filing for bankruptcy.
Depending on the type of debt that's being garnished, you might have other options. For example, if the IRS is garnishing your wages because of overdue taxes, you can make a settlement offer (an "offer in compromise") or set up a payment plan.
The most obvious consequence of a wage garnishment is a reduction in your take-home pay. A smaller paycheck can affect your ability to cover basic living expenses, potentially leading to difficulties paying your monthly bills.
Also, while a wage garnishment won't appear on your credit reports, creditors do report delinquent debt to the credit reporting agencies. And the reports can include information about how the debt is being collected, including through a wage garnishment. The missed payments culminating in a wage garnishment and other negative information will generally stay on your credit reports for seven years, affecting your future financial opportunities and potentially hindering your efforts to rebuild your credit.
Beyond the financial strain, the emotional consequences of wage garnishment can be taxing. Knowing that some of your earnings will be garnished can lead to stress and anxiety. Seeking advice from a lawyer and exploring ways to resolve the underlying debt or work out payment terms can lessen some of these pressures.
If you receive a notice of a wage garnishment order, you might be able to protect (exempt) some or all of your wages by filing an exemption claim with the court or raising an objection. The procedures you need to follow to object to a wage garnishment depend on the type of debt that the creditor is trying to collect, as well as the laws of your state. But usually, you must act quickly. You might have to go to a hearing, but if you win, a judge might eliminate or reduce the garnishment.
Again, you can often stop garnishments by filing for bankruptcy. Your state's exemption laws determine the amount of income you'll be able to keep.
Talk to a lawyer to learn more about how you can protect your wages.
Learn about wage garnishments for credit card debt.
Find out if a mortgage company can garnish your wages after foreclosure.
Get information about when a creditor will stop garnishing wages.
Check out the Florida Department of Economic Opportunity website at floridajobs.org for information about wage garnishment limits in Florida, including the procedures employers must follow when carrying out wage garnishment orders.
For information specific to your situation or to get help objecting to a garnishment, contact a local debt relief attorney.
]]>The FDCPA applies to every state and protects consumers from unfair and deceptive debt collection practices. The FDCPA also prohibits debt collectors from contacting you at certain times and places. Likewise, Florida’s debt collection laws protect those whose debts are in collection.
You can find the FCCPA in the Florida statutes at §§ 559.55 to 559.785.
The federal FDCPA limits what debt collectors can and can’t do when attempting to get you to pay a debt. For example, the FDCPA prevents debt collectors from talking to third parties about your debt (subject to some exceptions), calling you at work when you tell them not to do so, and engaging in other tactics designed to harass, abuse, or mislead you into paying a debt.
The FCCPA supplements the federal FDCPA and might provide you with even greater protection if you live in Florida.
The FCCPA prohibits both debt collectors and creditors from using certain types of abusive, deceptive, and misleading debt collection tactics. (Fla. Stat. § 559.55). The FDCPA, on the other hand, usually applies to collectors and some debt buyers, but not an original creditor unless it’s using a different name that implies a third party is attempting to collect the debt. (15 U.S.C. § 1692a).
The FCCPA requires all debt collectors, including those located out-of-state, to be registered with the state of Florida. Those who are exempt from registration include, among others:
An unregistered debt collector might be subject to fines of up to $10,000, plus attorneys' fees and costs. But you don’t have the right to sue a collection agency for failing to register.
Only Florida's Office of Financial Regulation of the Financial Services Commission has the authority to assess fines and enforce the registration requirements. Florida's attorney general can then file a lawsuit against that debt collector. (Fla. Stat. § 559.565).
The FCCPA prohibits creditors and debt collectors from engaging in abusive, harassing, unfair, fraudulent, deceptive, or misleading practices. Some actions that creditors and debt collectors can’t do under the FCCPA include:
If you think a debt collector is harassing you in violation of Florida law, you complain to the state Attorney General's office. Although the Attorney General won't intervene on your behalf, it uses complaints to learn about misconduct.
You can also file a lawsuit against the collector.
You have a private cause of action if a creditor or debt collector harms you in violation of the FCCPA. So, you can file a lawsuit in Florida against the collector or creditor.
If you win, the court may award to you:
You can file a complaint with Florida's Office of Financial Regulation and the federal Consumer Financial Protection Bureau (CFPB). After you submit a complaint, the CFPB will work to get you a response from the collector, typically within 15 days.
If a debt collector sues you, you have the right to respond in court. You also have the right to hire an attorney to represent you in the case.
Even though you're being sued, you can still try to settle the debt. If the collector violated federal or state laws when trying to collect from you, you could have leverage in debt settlement negotiations.
Learn what to do if a bill collector uses abusive tactics.
Read about what you should and shouldn't do when a debt collector calls.
Get tips on how to tell the difference between a debt collector and a scammer.
If you need help dealing with an aggressive debt collector, figuring out what option is best for handling your debts, negotiating a settlement, or responding to a lawsuit for nonpayment of a debt, consider consulting with a debt relief lawyer.
If you have a lot of debts, you might want to consider filing for bankruptcy. In that situation, you'll want to talk to a bankruptcy lawyer.
]]>Typically, you can get a payday loan in a store by giving the lender a postdated check, in person by providing the lender access to your bank account, or online. The lender gives you money, and the repayment due date generally corresponds with the date of your next paycheck.
You'll have to pay interest, usually at a very high rate, and any allowed costs. The interest amount is often called a "fee." Most consumer advocates warn against using payday lenders because the interest and fees are exorbitant.
Under Florida law, payday lenders are called "deferred presentment providers." (Fla. Stat. Ann. § 560.402 and following). Payday lending is limited in several ways. The law places limits on:
In Florida, payday advances can't exceed $500—no exceptions. (Fla. Stat. Ann. § 560.404).
You can only have one outstanding payday loan at a time. Loans are tracked through a central database. When you pay the loan back, you must wait out a 24-hour cooling-off period before taking out another payday loan. (Fla. Stat. Ann. § 560.404).
Payday loans can't be for fewer than 7 days or more than 31 days. Rollovers are also prohibited. (“Rolling the loan over” means you pay a fee to delay paying back the debt.) For example, if you take out a 14-day payday loan, the lender isn't permitted to roll the loan over, charging the fees again, for an additional 14 days—even though the entire length of time would be less than 31 days. The term is set when you take out the loan. But if you're unable to pay, you can extend the loan term without additional charges or interest. (Fla. Stat. Ann. § 560.404).
If you can't pay the loan in full at the end of the loan term, the lender has to provide a 60-day grace period without additional charge. The grace period depends on you making an appointment with a consumer credit counseling service within 7 days and completing the counseling within the 60-day grace period. (Fla. Stat. Ann. § 560.404).
The payday lender must give you a list of approved consumer credit counseling agencies affiliated with the National Foundation for Credit Counseling (NFCC) that provide credit counseling services to state residents in person, by telephone, or through the internet. (Fla. Stat. Ann. § 560.404).
Florida law limits the lender's fees on a payday loan to 10% of the loan amount, plus a $5 verification fee. (Fla. Stat. Ann. § 560.404, § 560.309(8)).
If a check you provided to the payday loan lender doesn't clear the bank and you're unable to pay, the lender is limited in what it can do. The payday lender may not pursue criminal action against you for a bad check. They can demand payment, but costs are limited to the 10% fee, the $5, and any bad-check fees the lender's bank imposed (if you didn't inform the lender in advance that the check couldn't be honored). The lender can't charge additional costs unless it files a lawsuit and a court imposes additional costs. The lender may seek to recover interest on its judgment but is limited to the state's judgment rate generally and not a rate based on the payday loan fee. (Fla. Stat. Ann. § 560.404, § 560.406).
Florida law requires that the payday loan agreement be in writing and signed by both parties on the date the loan is given. The loan agreement must contain the following, among other things:
The agreement can't legally contain terms whereby the borrower agrees to hold the lender harmless for any damages or actions, waives any rights under the law, agrees in advance to the entry of a judgment or wage garnishment, or waives any defenses to repayment. The fees allowed under the law may not be collected in advance, and the lender can't require any additional security or guarantors. Lastly, the lender has to provide a copy of the signed agreement to the borrower at the time of the transaction. (Fla. Stat. Ann. § 560.404).
People who take out payday loans often end up getting one payday loan after another (again, called "rolling the loan over") when they can't repay the initial loan.
For example Taylor gets a $300 payday loan with a $50 fee, but can’t repay it when the loan comes due. She pays another $50 fee to extend the due date. So, she'll have to pay $100 for a $300 loan. If she rolls the loan over again, she has to pay another $50. This payday loan has now cost Taylor $150, half of the original loan amount.
Remember, Florida law prohibits rolling over a payday loan. This law (and Florida's other restrictions on payday lending) protects people who might find themselves in the same position as Taylor in the example above. Still, as a general rule, it's best to avoid payday loans entirely. You probably have cheaper options are available for getting some money.
Rather than taking out a loan, you can look into other options, including:
However, you should generally avoid high-interest personal loans and car title loans.
If you find yourself in a tough spot and have no choice but to take out a payday loan in Florida (be sure to consider other alternatives first), ensuring you're dealing with a licensed lender is a good idea. The Florida Office of Financial Regulation's Division of Consumer Finance regulates payday lenders in the state. Go online to verify a payday lender's license.
Payday lenders licensed in Florida must comply with state laws and respond to inquiries by the Office of Financial Regulation (OFR) to maintain their license. If you have an issue with a lender, you can file a complaint on the OFR website or call 850-487-9687 if you have questions.
But if the lender isn't licensed in Florida and operates from another state or country through the internet or phone, the state might be unable to help you.
If you're having trouble repaying a payday loan, consider contacting the lender to find out about options. Remember, Florida law prohibits rolling the loan over (you can extend the loan term without additional charges or interest) and provides a 60-day grace period if you need it.
Also, seek assistance from an accredited, nonprofit credit counseling organization affiliated with the NFCC.
If you have a lot of debt that you potentially discharge (eliminate), you might want to consider filing for bankruptcy. In most cases, you can discharge a payday loan in Chapter 7 bankruptcy or pay some part of it in Chapter 13 bankruptcy (usually a small portion).
Again, the Florida Office of Financial Regulation's Division of Consumer Finance regulates payday lenders in the state. You can verify a license or file a complaint on their website or call 850-487-9687 if you have additional questions.
You can also file a complaint with the Consumer Federal Protection Bureau (CFPB). The CFPB is the federal government’s organization helps consumers with financial issues, including payday lending matters.
To get an explanation about applicable payday loan laws in Florida relevant to your situation, consider contacting a debt relief lawyer or a consumer protection lawyer.
]]>Florida law governs the contents of rent-to-own contracts. If the contract contains terms prohibited under the law, those terms are void and can't be enforced against you in court.
Moreover, anyone who violates the law may be subject to penalties, including fines, and you could recover damages.
Renting to own personal property, like a sofa or a television, is a way to acquire the property without committing to pay the full purchase price upfront. By entering into a rent-to-own contract, you agree to a short-term rental arrangement.
You sign a contract agreeing to make regular weekly or monthly payments and then you get the item. The longer the contract term, the less you'll pay each week or month. But you’ll pay more in total because of price markups and fees.
Under a rent-to-own contract, the person or business collecting rental payments from you is called the "lessor." The person paying the rent is called the "lessee."
Each time you pay the rent and keep the rented property, the agreement renews for another term until you've paid the purchase price in full and become the property owner. If you decide not to go through with the purchase, you can terminate the agreement by returning the property at the end of any rental period. But you might not get back any of the money you've paid. And if you simply stop paying, you'll probably lose the item and the money you've paid.
Florida law requires that any rent-to-own contract be in writing and signed by both parties. It must include all essential terms before it is signed, and a copy of the signed contract must be delivered to you. The printed portion of the contract must be in at least six-point type and must include a notice which informs you that you should not sign the contract until all of the blanks are filled in and that you must be provided an exact copy of the signed agreement which you should keep for your legal protection.
The agreement must state all information clearly, using commonly understood words and phrases. It must be divided into sections with the topics clearly labeled. All amounts and percentages must be stated in numbers rather than words. Additional information may be included, but it can't contradict, detract from, or draw attention away from any disclosures the law requires.
The following details must be included in Florida rent-to-own contracts:
The following terms are prohibited by law. If they're included in your contract, they're void and not enforceable against you. The agreement can't:
Florida law also limits the type of additional costs the rent-to-own lessor may charge.
If you stop making payments under the agreement, you can preserve your right to reinstate the contract within 60 days if you promptly surrender or return the property to the lessor or its agent upon request. The 60-day time frame is calculated from the last day of the rental period for which you did pay. The total amount required to reinstate may include all unpaid rental payments, any rental renewal charges incurred, a reinstatement fee of no more than five dollars, and a delivery charge if the property needs to be redelivered.
If you reinstate, the lessor must provide you with the same property that you were renting before or substitute property of comparable quality and condition. If substitute property is provided, the disclosure as to whether the property is new or used must be made again.
The potential benefits of rent-to-own contracts include the ability to build credit (some rent-to-own plans report your payments to the credit reporting agencies, but others don’t) and eventually own the property.
But these kinds of contracts also have significant downsides, such as high-interest rates and expensive fees. Also, you could end up paying a lot more than the item is worth, often at least twice what you'd pay in cash, sometimes more. In addition, if you default (fall behind in payments), you might face hounding collection calls and harassment to try to get you to pay up.
A lessor that wilfully violates the law may be subject to fines. Provided you have given the lessor 30 days' notice of a violation that has not been corrected, you can sue for actual damages or 25% of the total cost of the purchase price plus attorneys' fees and court costs. The lessor's remedies are limited to those in the agreement and may not exceed the amounts set under the law, which can include attorneys' fees and costs.
If you're having issues with the lessor of a rent-to-own contract, such as aggressive debt collection tactics, you can file a complaint with the Federal Trade Commission (FTC). For more information about your rights under rent-to-own contracts, contact the Florida state attorney general's office or the Florida Division of Consumer Services. You might also consider contacting a consumer protection attorney.
]]>I bought a car in Florida over four years ago. I had only three payments left when I lost my job. The loan balance at that time was $1,200, but the lender repossessed it anyway. I’ve heard that even if the lender takes your car, it can still sue you for the loan balance. Am I on the hook for the last $1,200? I won’t have any money until I find a new job.
You're in luck because your loan balance at the time you stopped paying was under $2,000. Normally, a car lender can demand that you repay the “deficiency” (see below) after car repossession. But Florida law makes an exception: If your unpaid balance at the time of default is less than $2,000, the lender can't go after you for a deficiency. (Fla. Stat. Ann. §516.31(3)).
If you fall behind in your car loan payments, your car lender can arrange to have your car repossessed. When this happens, the car repossession company simply takes your car—it doesn’t need your permission. Although, in certain situations, it must provide some type of notice first.
In most cases, the lender then sells your car at an auction or private sale. If the sale price isn't enough to cover the remaining balance on your car loan and the lender’s repossession and auction costs, you'll usually owe the difference, which is called a "deficiency."
On the other hand, if the sale price is more than your loan balance plus costs, there won’t be a deficiency. Instead, the lender would have to turn over any surplus money to you. Unfortunately, in most car repossession situations, the former car owner ends up owing a deficiency.
Again, under Florida law, if at the time of default (when you stopped paying, for example), the unpaid balance is less than $2,000, the car lender can't try to collect a deficiency from you. (Fla. Stat. Ann. §516.31(3)).
Also, because the lender has to follow Florida laws when repossessing the car and conducting a sale, if it fails to do so, you might have a defense to the deficiency even if your unpaid balance was $2,000 or greater at the time of default.
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