Alabama Debt Collection Laws: Your Rights and Defenses

A collection agency bought your old credit card debt. Now they're calling at 7 a.m., leaving vague voicemails about "legal action," and sending letters that look like court documents. You're in Alabama. You need to know what they can and cannot do.

Alabama follows federal debt collection law—specifically the Fair Debt Collection Practices Act (FDCPA). The state doesn't add extra consumer protections, but it doesn't need to. The FDCPA gives you real leverage if you know how to use it.

What the FDCPA Actually Protects You From

Third-party debt collectors,agencies that bought your debt or work on behalf of the original creditor,cannot:

• Call before 8 a.m. Or after 9 p.m. Your time. If you're in Mobile and they're in Utah, they follow your clock.
• Contact you after you send written notice that you have an attorney. Once you're represented, they deal with your lawyer.
• Call you at work if you tell them your employer forbids it. One written request ends workplace calls.
• Discuss your debt with anyone but you, your spouse, or your attorney. They can contact others to locate you, but they can't mention the debt.
• Use profanity, threats of violence, or repeated calls intended to harass. Three calls in one hour crosses the line.
• Lie about who they are. Claiming to be a lawyer, government official, or court representative when they're not violates federal law.
• Threaten wage garnishment or arrest without court approval. They need a judgment first. Alabama allows wage garnishment, but only after they sue and win.
• Send letters that mimic court documents. Fake legal letterhead is illegal.

If a collector breaks any of these rules, document it. Save voicemails. Screenshot call logs. Keep every letter. You can sue them under the FDCPA and recover up to $1,000 in statutory damages plus actual damages and attorney fees. That means your lawyer works for free if you win.

Alabama's Statute of Limitations on Debt

Every debt has an expiration date for lawsuits. Once the statute of limitations passes, collectors can still ask for payment, but they can't sue you and win. Alabama's deadlines are:

• Credit card debt: 3 years (written contracts)
• Medical debt: 6 years (oral or implied contracts)
• Auto loans: 6 years
• Personal loans: 6 years
• Mortgages: 6 years

The clock starts on the date of your last payment or the date you last used the account. If you made a payment three years and one day ago on a credit card, that debt is time-barred for lawsuits.

What Happens If They Sue Anyway

Debt collectors sue on time-barred debts constantly. They bet you won't respond or won't know the law. If you receive a lawsuit on an old debt, you must file an Answer and raise the statute of limitations as an affirmative defense. The court won't do it for you.

Alabama courts take statutes of limitations seriously. If you prove the debt is past the deadline, the case gets dismissed. But you have to show up. A default judgment has no expiration date,it lasts 20 years and restarts every time it's renewed.

When Collectors Take You to Court

If the debt is within the statute of limitations and you ignore collection letters, you'll likely get sued. In Alabama, collectors file in district or circuit court depending on the amount. You'll receive a Summons and Complaint,real court documents delivered by a process server or certified mail.

You have 30 days from the date you're served to file an Answer. Miss that deadline and the collector wins by default. They'll get a judgment, then move to garnish your wages or bank account.

Your Defense Options

Filing an Answer isn't about denying you owe money. It's about making them prove their case. Raise these defenses:

• Statute of limitations. If the debt is too old, say so explicitly.
• Lack of standing. Collectors must prove they own the debt. If they can't produce a valid assignment, they can't win.
• Incorrect amount. Challenge the balance. Demand itemized proof of the original debt, interest, and fees.
• Improper service. If you weren't properly served, the court lacks jurisdiction.

You can file an Answer yourself or use a service like Talk About Debt's bankruptcy screener to see if bankruptcy is a better path. If you owe multiple creditors and can't afford to fight each lawsuit, Chapter 7 might eliminate everything at once.

Alabama's Wage Garnishment Rules

Alabama allows wage garnishment after a judgment. Federal law caps it at 25% of your disposable income or the amount by which your weekly income exceeds 30 times the federal minimum wage,whichever is less. If you earn $400 a week after taxes, they can take $100.

Certain income is exempt:

• Social Security benefits
• Disability payments
• Veterans benefits
• Unemployment compensation

If a collector tries to garnish exempt income, file a Claim of Exemption with the court immediately. You'll need proof of the income source.

How to Stop Collection Calls

You have the right to stop collectors from calling. Send a written cease-and-desist letter by certified mail. Use this language:

"Under the FDCPA, I demand that you cease all communication with me regarding this alleged debt. Do not call, text, or contact me except to confirm receipt of this letter or to notify me of specific legal action."

Include your name, address, and the account number they reference. Once they receive it, they can only contact you to confirm they're stopping or to tell you they're suing. The calls end, but you give up the chance to negotiate a settlement.

Debt Validation: Make Them Prove It

When a collector first contacts you, they must send a validation notice within five days. It lists the debt amount, the original creditor, and your right to dispute. If you dispute the debt in writing within 30 days, they must stop collection efforts until they mail you verification.

Send a debt validation letter asking for:

• Proof they own the debt
• A copy of the original signed contract
• An itemized accounting of the balance
• Proof the statute of limitations hasn't expired

Many collectors can't produce this documentation. If they continue collecting without validating, they violate the FDCPA. That's grounds for a lawsuit.

Should You Consider Bankruptcy?

If you're being sued by multiple collectors or you're drowning in debt with no realistic repayment plan, bankruptcy might be the fastest exit. Alabama uses federal bankruptcy exemptions or its own state exemptions,whichever protects more of your property.

Chapter 7 wipes out credit card debt, medical bills, and personal loans in about four months. Chapter 13 creates a 3-5 year repayment plan and stops lawsuits and garnishments immediately. Both options stop collection calls the moment you file.

Use our free bankruptcy assessment to see if you qualify and what you'd keep.

What to Do Right Now

If a collector is hounding you:

1. Request debt validation within 30 days of their first contact.
2. Document every violation. Save voicemails, texts, and letters. Note dates and times of calls.
3. Check the statute of limitations. Pull your credit report and calculate when you last paid.
4. Respond to lawsuits. If you're served, file an Answer within 30 days.
5. Consult a lawyer if the collector violated the FDCPA. Many consumer attorneys work on contingency.

You're not helpless. Alabama law and federal protections give you tools. Use them.