Statute of Limitations on Debt Collection in Alabama
Alabama's statute of limitations on debt varies from three to 10 years depending on debt type. Credit card and open account debts have a three-year limit, while written contracts have six years and sealed contracts have 10 years. You can use the expired statute of limitations as a defense to get your debt lawsuit dismissed.
Answer Your LawsuitSummary: Alabama’s statute of limitations on debt varies by debt type. Credit card debt has a three-year limit in Alabama. Creditors and collectors can only sue you within three years of your last account action. You can use Alabama’s statute of limitations laws as a defense in court.
Do you have an old unpaid debt in Alabama? Your creditor may file a collection lawsuit against you for breach of contract. You recently received a demand letter from your creditor. Make sure you know your defenses before making payments or promises. One important defense is the statute of limitations on debt.
Beat Your Alabama Debt Lawsuit with the Right Answer
Alabama's three-year credit card debt limit could dismiss your case. Draft your Answer with all applicable defenses in 15 minutes. An attorney reviews your document before filing.
Draft Your Answer NowThe statute of limitations refers to the collection time limit. After the statute of limitations lapses, your creditor cannot file any collection lawsuit. They cannot use any other judicial method to collect what you owe.
See below for Alabama’s statute of limitations on debt collection.
Statute of Limitations on Debt in Alabama
Alabama’s statute of limitations on debt depends on the debt type. Alabama recognizes only two enforceable debt categories: debts based on contracts and accounts. The statute of limitations differs depending on your contract or account type.
According to AL Code §6-2-37 (2021), creditors and collectors must take you to court within three years. The clock starts from the last action on the account. Alabama’s statute of limitations on credit card debt is three years.
AL Code §6-2-36 (2021) states that creditors and collectors have four years to sue for breach of contract debt.
AL Code §6-2-34(4-5)(2021) gives creditors six years to sue for debts with written, unsealed contracts. The same applies to debts related to rent.
Finally, AL Code §6-2-33 (2021) grants creditors 10 years to sue for debts in writing under seal.
Your debt may be based on a written or oral contract. It could involve an open account, promissory note, mortgage, or another loan form. If your creditor obtains a favorable judgment, that judgment has its own statute of limitations. Keep reading for various Alabama debt statute of limitations.
Alabama Statute of Limitations on Different Debt Types Explained
The following table outlines Alabama’s statute of limitations on different debt types:
| Debt Type | Deadline in Years |
|---|---|
| Credit card | 3 |
| Open account | 3 |
| State tax | 3 |
| Breach of contract | 4 |
| Written contract, unsealed | 6 |
| Oral contract | 6 |
| Rent | 6 |
| Written contract, sealed | 10 |
| Judgment | 10-20 |
Sealed Contracts: 10 Years
When your debt is based on a contract under seal, your creditor has ten years to file. A sealed contract is a formal written agreement stating each party’s promises. It does not require consideration. Both parties must sign it, it must have a seal, and be delivered. After all three requirements are complete, the sealed contract becomes conclusive between parties.
Written Contracts: 6 Years
Promises in writing not under seal have a six-year prescriptive period. Your creditor must file a collection lawsuit within six years from default. Otherwise, your debt becomes time-barred.
Unlike a sealed contract, a written contract must have stated valuable consideration. It does not need a seal. It becomes valid and enforceable when both parties sign. Examples include medical debts, lease contracts, or any written and signed agreement.
Oral Contract: 6 Years
An oral contract or verbal agreement between parties is legally binding. It has a six-year statute of limitations.
Recovery of Money from Loan Account: 6 Years
If your debt arises from a personal loan or stated account, your creditor has six years.
Open and Unliquidated Account: 3 Years
If your debt is an open account, creditors can sue within three years. Open accounts include unpaid outstanding credit card balances. The clock starts from the time you defaulted on your balance.
Breach of Contract of Sale: 1-4 Years
In Alabama, the default prescriptive period for breach of contract of sales is four years. Parties may reduce this to no less than one year. Auto loan debts also fall under this category.
State Tax Debt: 3 Years
The state has three years to audit your tax return. They can access additional tax, penalty, or interest from your filing date. After three years, the state cannot pursue you for tax deficiencies.
Judgments: 10-20 Years
A judgment on debt may be enforced within ten years after entry. Suppose the judgment will not be satisfied within ten years. The judgment creditor may file for revival before the ten-year period ends. They can then enforce it for the next successive ten years. A judgment in Alabama may be enforced for 20 years.
Use the Statute of Limitations as a Defense
Another important principle to note is whether you are in Alabama. The statute of limitations period only begins when you are present in Alabama. Your subsequent absence interrupts the time. The time you were not in the state is excluded when calculating the filing period.
If your debt passes the statute of limitations period, creditors are barred from legal remedy. You still owe the creditor, but they cannot ask the court to garnish wages. They cannot levy your property to satisfy your debt.
The exception is when you make a partial payment or unconditional written promise. Both parties must sign the promise. These actions will restart the statute of limitations. Your creditor may then file a collection lawsuit and pursue another legal remedy.
Understanding all statute of limitations laws can be burdensome. You must be familiar with the statute if you seek this defense against your creditor. If the statute of limitations has not expired, you should consider other defenses for your case. Our partner Solo can help you identify the right defenses.
Respond to a Debt Lawsuit in Alabama
You can save yourself time, money, and stress when you represent yourself. Here’s how to handle your Alabama debt collection case.
If you’ve been sued for debt in Alabama, respond with a written Answer. Our partner Solo can help you draft and file your customized Answer in minutes.
Follow these three steps while drafting your Answer:
- Respond to each claim listed in the Complaint.
- Assert your affirmative defenses.
- File the Answer in court and send a copy to the opposing attorney.
If you know your debt is past the statute of limitations, list this as an affirmative defense. Alabama’s three-year credit card debt limit or other applicable deadline may dismiss your case.
What Is Solo?
Solo makes it easy to resolve debt with debt collectors. You can use Solo to respond to a debt lawsuit and send letters to collectors. You can even settle a debt.
Solo’s Answer service is a step-by-step web app. It asks you all necessary questions to complete your Answer. Upon completion, an attorney reviews your document and files it for you.
SoloSettle can help you contact your debt collector or creditor. You can negotiate the debt to settle for less, all online. It simplifies and streamlines the debt settlement process.
No matter where you are in the debt collection process, Solo helps you resolve debt.