Debt relief in Alabama: collection rules, time limits and your options

Updated November 9, 2026

Alabama at a glance (checked November 2026)

Debt collection rules in Alabama

Alabama doesn't have its own debt collection practices law, so the rules that protect you come from the federal Fair Debt Collection Practices Act and the CFPB's Regulation F. Under them, a collection agency can't:

• call before 8 a.m. or after 9 p.m. your time, or call over and over to wear you down,
• threaten arrest, jail or violence, or threaten a lawsuit it doesn't plan to file,
• lie about how much you owe or pretend to be a lawyer or a government office,
• discuss your debt with your family, neighbors or employer.

Within five days of first contacting you, a collector must send a validation notice that shows who it's collecting for and how much. If you dispute the debt in writing within 30 days, it has to pause collection until it sends you proof.

Alabama also has no licensing program for debt collectors. Collection agencies pay a business license tax (Code of Alabama § 40-12-80), but no state board screens them, so keep notes of every call and letter in case you need to complain or talk to a lawyer.

How long creditors have to sue

Alabama gives creditors 3 years to sue on an open account (Code of Alabama § 6-2-37) and 6 years on a written contract (§ 6-2-34). Credit cards sit in between: Alabama courts have treated them as open accounts in some cases and as written contracts or "accounts stated" in others, so a collector may claim it has the full 6 years.

Once the time limit runs out, the debt is "time-barred." A collector can still ask you to pay, but federal rules don't allow it to sue you, or threaten to, over a time-barred debt. Before you pay anything on an old debt, or sign a promise to pay, ask the collector in writing how old the debt is, because a new payment or written promise can give a creditor more time in some states.

If you're served with a lawsuit, file an answer by the deadline on the summons. If you don't, the creditor usually wins by default, even on a debt that's too old.

What can be garnished in Alabama

After a creditor wins a judgment, Alabama follows the federal limit on wage garnishment for consumer debts: the creditor can take the lesser of 25% of your disposable earnings (pay after required deductions) or the amount above 30 times the federal minimum wage, which is $217.50 a week. If your weekly take-home pay is $217.50 or less, nothing can be taken.

A judgment that's recorded in the probate office of a county becomes a lien on property you own there for 10 years (Code of Alabama § 6-9-211), so it can surface when you sell or refinance. Social Security and most other federal benefits stay protected from private creditors, even in a bank account, but Alabama's homestead and personal property exemptions are modest.

Ways out of debt in Alabama

• Nonprofit credit counseling can roll your cards into one debt management plan, usually at a lower interest rate. Look for an agency accredited by the NFCC or FCAA.
• A consolidation loan only helps if the new rate beats what you pay now. Check the numbers with our debt consolidation calculator.
• Debt settlement companies can't charge you a fee until they've actually settled a debt, under federal rules. Forgiven amounts can count as taxable income.
• Bankruptcy: Alabama makes you use its own exemption list rather than the federal one, and its homestead protection is small compared with most states, so ask a bankruptcy attorney what you would keep before you file.

Where to get help or complain

• Alabama Attorney General, Consumer Interest Division takes complaints online or at 1-800-392-5658.
• Consumer Financial Protection Bureau takes complaints about collectors and lenders nationwide.
• Alabama Legal Help has free legal information and lists legal aid offices.

General information about Alabama law, not legal advice. Checked November 2026.