When you fail to make credit card payments as agreed, creditors can take you to court and attempt to collect through garnishments and levies. However, Florida law protects your home from seizure for most consumer debt including credit cards. If a credit card company initiates a lawsuit, you retain the right to claim a homestead exemption and protect your house from judgment.
Lawsuit Process
Once you receive a court summons or notification of an impending lawsuit, the courts provide a limited time frame for you to answer the complaint. Do not ignore a lawsuit as this may result in a judgment against you. If you lose the case, creditors may request a writ of garnishment or levy against your assets or property. Any nonexempt property, wages or funds may be seized to repay the debt.
Homestead Protection
Florida law protects your home from levies or seizure for most debts. Under Chapter 222 of the Florida Statutes, credit card companies cannot take your home for outstanding debt. Do not assume the exemption exists until you contact the court. Prepare a written statement describing the property and your claim that the property is your home, therefore exempt from judgment. Sign and date the letter and file a copy with your circuit court. If there is an existing levy on your home, you can declare a homestead exemption after the judgment or prior to a forced sale.
Concerns
While your home may be protected from credit card companies, other property may not be exempt. Judgments may lead to wage garnishment, bank levies or seizure of nonexempt personal property. Personal property exemptions include but are not limited to vehicles worth up to $1,000, other assets worth up to $1,000, some real estate equity and necessary medical equipment. Additionally, most government benefits cannot be garnished for credit card debt. As with homestead exemptions, do not assume protection. Provide the courts with proof of income or property exemptions.
Debt Collection Laws
The Fair Debt Collection Practices Act protects you from unfair or deceptive collection attempts. Creditors cannot threaten to take your home or otherwise falsely claim legal action forbidden by federal and state laws. If a debt collector uses deceptive practices or otherwise harasses you in an attempt to collect on credit card debt, file a complaint with the Federal Trade Commission and your state attorney general. Additionally, you retain the right to sue a debt collector for violating the law within a year of the violation.
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