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Date Posted: August 31, 2023 12:09 pm
Life in today’s ever-changing, consumption-oriented society brings various financial challenges. Many people, unable to cope with the pressure of consumerism, fail to generate sufficient income to meet their everyday needs and satisfy constantly evolving spending habits. Whether you struggle with unexpected medical expenses, car repair, student loans, or mortgage repayments – the growing consumer debt can be financially and emotionally overwhelming. So, what are your options when you find yourself in financial distress?
This article will shed light on Florida debt statistics, including the Sunshine State debt collection legislation while exploring potential options for dealing with consumer debt problems. Finally, we will show why mediation is the best debt resolution tool for preserving your financial and emotional well-being, underscore its vast benefits, and sketch out the conflict dispute resolution process. Stay tuned!
Here is what Florida’s debt statistics look like in the decade behind us:
Florida residents owe, on average, $49,000 in household debt, not counting the mortgages. To comprehend the total household debt, note that in 2010, mortgages amounted to 75% of total household debt.
On the other hand, the Sunshine State’s student loan debt was $94 billion in 2021 ($39,700 on average).
The average auto debt in 2020 was $20,110, which puts Florida in 23rd place in the nation. Compared to the year before, car debt increased by 4%.
Floridians owe $7,049 on average on their credit card (the seventh highest nationwide). The credit card debt decreased in 2019 by 9% (or $73 billion) – the first debt declines in eight years.
Regarding dispute resolution, debt collection lawsuits comprise about 24% of the total civil cases before Florida’s courts. Put differently, 1 in 4 civil cases relates to debt collection, which is about 4 million cases.
The Florida Consumer Collection Practices Act (FCCPA) regulates debt collectors and creditors, prohibiting them from using deceptive, abusive, fraudulent, or misleading tactics to collect debts. That means that debt collectors and creditors cannot pretend to be police officers, use violence or threat to use force, communicate with your employer, disclose to a third party information related to your debt (that can harm your reputation), harass you or your family, misrepresent themselves as attorneys, contact you between 9 p.m. and 8 a.m. (unless you agree), send you letters that look like government documents, use profane or vulgar language with you or your family, etc.
The FCCPA supplements the federal Fair Debt Collection Practices Act (FDCPA), providing consumers with comprehensive legal protections against deceptive, misleading, and unfair debt collection practices.
The inability to pay debts on time will result in the collection agency’s attempts to get what you owe on behalf of the creditor. In doing so, agencies often engage in deceptive and unfair collection practices. In that situation, the FCCPA and the FDCPA offer consumers protection, enabling them to file a complaint with the Consumer Finance Protection Bureau (CFPB) or a lawsuit against the collector (or creditor), seeking to compensate actual damages, attorneys’ fees, and court costs.
However, pursuing consumer rights before government agencies and courts is financially exhausting and time-consuming, bringing insufficient monetary and emotional satisfaction to affected parties. Receiving compensation after years of dragging through the administrative and judicial system proves a Pyrrhic victory for the debtors. If so, then what is a solution?
As shown above, resolving consumer debt disputes in court or before the administrative bodies offers little or no benefits. In the best-case scenario, you will receive symbolic compensation that will disappear after paying attorney and court filing fees.
Unlike these ineffective methods, mediation offers a different approach. Instead of state-appointed judges and government officials who see your case as another number in their statistics, mediators (neutral third parties) offer compassionate and mutually beneficial solutions.
As an impartial professional, a mediator seeks to understand the debtor’s financial problems by analyzing their overall situation, including debts, expenses, income, etc. The mediation process focuses on friendly negotiations in a neutral and stress-free environment. The mediator facilitates talks between the parties (the debtor and the creditor) and helps them agree on realistic solutions that fit individual needs. That means creating a repayment plan that enables debtors to repay what they owe without sinking deeper into the financial abyss, on the one hand, and helping creditors recover a larger or smaller portion of the funds they borrowed, on the other. In essence, mediation seeks win-win solutions, unlike other methods that inevitably leave one of the parties dissatisfied.
Mediation offers reciprocal solutions to disputed parties in debt collection cases. Let us have a look at some of the benefits that put mediation at the top of the list when it comes to consumer debt conflict resolution:
1. Comprehensive Approach to Debt Resolution
A holistic approach to debt issues sets mediation apart from bankruptcy proceedings. Instead of treating debtors as lawbreakers, mediators seek to analyze their overall financial situation. By understanding the root causes of the debt crisis, mediators help parties negotiate mutually beneficial settlements that respect reciprocal interests and repaying ability.
2. Continuation of Relationships
Mediation helps creditors and debtors overcome disagreements, emotional distress, and potential harassment using a collaborative approach. Instead of engaging in a vindictive, all-or-nothing battle, parties find a common language through meaningful negotiations. Win-win solutions enable creditors and debtors to come out of dispute without hard feelings and thus continue their mutually beneficial relationships.
3. Predatory Practices Prevention
Debt collection agencies often use threats or engage in similar predatory practices. That is why the FCCPA and the FDCPA introduced special protections against such behaviors. While administrative proceedings can offer some protection, they cannot completely prevent or reduce the effects of abusive practices. On the other hand, mediation places parties at a negotiation table, motivating them to participate in civilized, friendly talks. The neutral mediation environment eliminates every possibility of profane or vulgar communication, threats, deception, or harassment.
4. Mental Well-Being Benefits
Stress caused by the inability to pay debts on time devastates mental health. Feelings of insecurity, anxiety, and fear due to financial troubles tear apart our overall well-being. Litigation and other dispute resolution methods do not help – on the contrary. Mediation offers a helping hand. By focusing on peaceful negotiations and promoting mutually beneficial solutions, mediation helps reduce stress and depression while improving overall well-being.
Knowing the benefits of consumer dispute mediation, you probably want to learn more about the process. Here are some tips on finding the right mediator and navigating the debt relief procedure:
Finding the mediation service that best suits your needs is not easy. Check the local associations and their member lists and see each mediator’s specialization and success record. Analyze their clients’ reviews and consult with people you know. Finally, choose an experienced mediator specializing in debt collection disputes.
Once you have hired a debt collection mediator, start a consultation, and allow the mediator to assess your financial situation. The evaluation stage enables them to find the right approach to your circumstances. After evaluating your debt, income, and expenses, the mediator will initiate the negotiation to help you and the other party find mutually acceptable solutions.
Negotiating debt collection cases consists of finding the right measure between debt relief and partial repayment. The mediator facilitates the talks and assists parties in creating possible solutions that may include extending repayment periods, reducing interest rates, etc.
After agreeing on mutually acceptable terms, parties work with the mediator to set up the structured repayment plan. The plan consists of a precise repayment timetable and other debt-relief conditions.
Adhering to the repayment plan will eventually lead to fulfilling your obligations and debt relief. Once debt-free, focus on improving your financial discipline to avoid potential problems in the future.
Are you struggling with debt and cannot find a way out? Do you have problems fulfilling financial obligations on time? Do all conventional dispute resolution mechanisms seem incapable of helping you find common ground with your creditors?
Look no further! Kim Torres is a Supreme Court of Florida-certified mediator with decades of experience dealing with the most contested consumer debt disputes.
Her subject matter expertise, compassion, utmost dedication, and adherence to the highest ethical standards set her apart from competitors.
Kim will spare no effort in helping you find a common language with your creditor, agreeing on repayment schedules, interest rates, and other mutually beneficial solutions.
Do not hesitate to reach out today at (321) 821-9995 or via email at info@torresmediation.com.