FAQ Credit Card Lawsuit Defense

Ignoring a lawsuit is the most common mistake consumers make. If you do not file a response or show up to court, the judge will likely enter a default judgment against you. In Miami and South Florida, a judgment is a powerful tool that allows creditors to:

• Garnish your wages: Taking a portion of your paycheck directly.
• Freeze bank accounts: Seizing funds from your checking or savings.
• Place liens on property: Attaching a legal claim to your non-homestead assets.

A judgment in Florida is valid for 20 years and accrues interest over time. It is much harder to “undo” a judgment than it is to defend the initial lawsuit.

The Statute of Limitations is the time limit a creditor has to file a lawsuit. In Florida, the timeline generally depends on how the debt is categorized:

• Written Contracts: 5 years.
• Open-Ended Accounts (most credit cards): 4 or 5 years, depending on the evidence provided.

The “clock” usually starts from the date of your last payment or the date the account became delinquent. If a debt buyer sues you for an account where the last activity was six years ago, you may have a complete defense to have the case dismissed. However, be careful: making even a small payment can “reset” this clock in Florida.

Yes. Many people believe that once a lawsuit starts, it must go to trial. In reality, the vast majority of credit card cases in South Florida settle before reaching a courtroom.

Creditors and debt buyers (like Midland Credit Management or Portfolio Recovery Associates) are often willing to negotiate a lump-sum settlement for less than the full balance or a structured payment plan. Engaging in settlement negotiations can often result in the lawsuit being dismissed with prejudice, meaning it cannot be refiled. Having an attorney handle these negotiations typically leads to more favorable terms than attempting to settle on your own.

Several legal defenses can lead to a case being dismissed or the balance being reduced:

• Lack of Standing: This is common when a “debt buyer” sues you. They must prove they legally own your specific account through a clear chain of title.
• Statute of Limitations: The debt is too old to be legally enforced.
• Inaccurate Balance: The creditor cannot prove the exact amount owed or has added unauthorized fees.
• Identity Theft: You never opened or authorized the account.
• Accord and Satisfaction: You already settled the debt previously.

Florida has some of the strongest debtor protection laws in the country, but garnishment is still possible. If a creditor wins a judgment, they can garnish up to 25% of your disposable earnings.

However, Florida law provides a “Head of Family” exemption. If you provide more than half of the support for a dependent (child, spouse, or other), your wages may be completely exempt from garnishment under Florida Statute § 222.11. This protection is not automatic; you must proactively claim the exemption in court after a judgment is entered.

Florida is famous for its Homestead Exemption. Under the Florida Constitution, your primary residence is generally protected from forced sale by most creditors, including credit card companies.

While a creditor might attempt to record a certified copy of a judgment in the public records, which creates a lien on real property this lien typically cannot be used to foreclose on your homestead. It may, however, create issues if you try to sell or refinance the home later. Consulting with a local attorney is vital to ensure your homestead protections are properly documented.

An Original Creditor is the bank that issued the card (e.g., Chase, Citibank). A Debt Buyer is a company that purchases “charged-off” debt for pennies on the dollar.

In South Florida courts, debt buyers often face a higher hurdle. They must provide “assignment” documents proving they purchased your specific account. If they cannot produce the contract or the billing statements, they may fail to meet their burden of proof. Many cases are won simply because the debt buyer lacks the proper paperwork to prove they have the right to sue you.

While you are permitted to represent yourself (“Pro Se”) in Small Claims Court, it is often risky. Creditors are always represented by experienced attorneys who know the rules of evidence and procedure.

Even in Small Claims, you must file proper motions and raise “Affirmative Defenses” at the right time, or you waive them forever. Many South Florida defense firms offer flat-fee arrangements for these cases, which can be more cost-effective than paying a full judgment plus the creditor’s legal fees.

Yes. Filing for bankruptcy triggers an “Automatic Stay,” which immediately halts all collection activity, including active lawsuits and pending garnishments.

For many Miami residents with overwhelming debt across multiple accounts, a Chapter 7 or Chapter 13 bankruptcy may be a more comprehensive solution than defending lawsuits one by one. Bankruptcy can permanently discharge (eliminate) credit card debt, giving you a fresh financial start.