Having customers who won’t pay their bills after you extend them credit, is a frustrating situation. Even after letters, emails and phone calls, some debtors refuse to respond.
At some point, you must decide if you will take more drastic measures to collect the money you are owed. However, did you know the clock is ticking on the amount of time you have to do this?
Understanding the statute of limitations on collecting a debt in Florida
In most cases, you have five years to collect contractual and consumer debts. If you do not collect the debt within that amount of time and don’t seek a judgment, you lose your right and ability to enforce the debt.
While this is the general rule in Florida’s debt collecting statute of limitations, there are a few other factors you should know. For example, the five-year time limit begins when a debtor misses a payment, not when they first opened the account. Also, debtors may reset this clock if they make a payment or partial payment in response to your collection efforts.
Why you shouldn’t wait to collect a debt
If you decide to wait until the statute of limitations has passed to pursue the debt, then it’s possible for the debtor to have the case dismissed. In this case, it would be impossible ever to recover the funds you are owed.
Remember, taking legal action is within your rights. Getting a judgment issued by the court against a debtor will allow you to continue collection efforts for up to 20 years. Also, with a judgment, you can use other forms of collection, such as liens and wage garnishments if necessary.