Understanding debt settlement is the best course of action prior to taking any action in Florida. Residents who struggle with their debts, their income, and making their payments might be the best candidates for debt settlement, but it’s not right for everyone. Before you make such a significant financial decision, it’s wise to educate yourself on the pros, cons, and financial ramifications of debt settlement. Consumers in Florida rank among the lowest in terms of average household income at only $40,750.

There are more than 19 million residents in Florida, and more than a million families live below the statewide poverty line. This makes it difficult for Florida residents to make their minimum monthly debt payments, and they continue to find themselves in despair. While not all families are struggling in Florida, it’s not uncommon to find financial discourse throughout the state. In counties such as St. Johns County, the median family income is more than $79,000 but the per capita income is only $36,000. This is one of the wealthiest counties in Florida, as opposed to Union County where the median household income is $53,000 and the per capita income is only $13,600. What’s most interesting is that the unemployment rate is rather low in Florida coming in at only 5.6%.

For obvious reasons, many people in Florida live in an extreme financial hardship type of situation, and they feel they have no help with their finances. It’s not always the end of the road, however. There are options for many.

Debt Settlement Benefits in Florida

The first question most Florida residents ask is who benefits most from debt settlement. The best candidates for this type of program include the following:

  • People who are already behind on debt payments
  • People who cannot make their debt payments
  • Those who are considering bankruptcy
  • Those who cannot afford to survive

If you meet this criteria, you should consider debt consolidation. The benefits are numerous, and the help can be a huge relief. When you work with a debt settlement company, they’ll speak to your creditors to negotiate your debts. They’ll lower the total amount you owe, and it can be as much as 40% less than what you actually owe. The cards and accounts are then closed, you can no longer use them anymore, and you begin making payments to the settlement company. They disperse your funds to the creditors until your accounts are paid in full.

The biggest benefit is that it stops your credit from becoming worse. Since you’re already missing payments and making late payments, your credit has been greatly affected. It’s not a good change, but you can put an end to it by settling your debts. This won’t fix your credit, but it will make it easier for you to improve it. No negative accounts will be removed from your account, but they do fall off no more than 7 years after they appear.

You also eliminate numerous interest rates. Now you pay only one, in a much lower payment, and your life is made much more affordable. You’ll not be able to apply for any credit with great rates, if you can apply at all. The good news is your debts are paid off faster and for far less than you owe. This is the silver lining associated with this type of debt settlement program.

Debt Settlement Laws in Florida

There are laws in place to govern the act of debt settlement in Florida, and they’re strict. The law does not require any creditor to willingly negotiate a debt settlement with a consumer. However, they are more likely to accept a debt settlement offer from a consumer who is already missing or behind on payments because it means their customers are considering bankruptcy. If a consumer goes through this process, it usually means the creditor gets nothing. They’re happy to take at least a portion of your owed debts before giving it all up to bankruptcy.

The law requires all Florida residents meet the minimum requirements to apply for debt consolidation:

  • Have at least $7,500 in debt
  • Already late on payments
  • Balance continues to grow

Furthermore, there is a law that specifies which debts can be included in this type of settlement. Only unsecured debts can be considered in this settlement. This includes credit cards, medical bills, and other debts without collateral. Once you get the settlement offers settled, be sure to get them in writing. It’s not helpful to get them verbally, as it’s difficult to prove them if anything should go wrong.

Debt settlement in Florida should be handled with care, and it should only be handled with a reputable debt settlement company. Too many work without a good reputation taking money from individuals unable to afford what they’re paying, and they run off with the money without consolidating any debts.