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Debt Collection Laws in Alabama

Sarah Edwards | July 27, 2023

Sarah Edwards
Legal Expert
Sarah Edwards, BS

Sarah Harris is a professional researcher and writer specializing in legal content. An Emerson College alumna, she holds a Bachelor of Science in Communication from the prestigious Boston institution.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Summary: If you’re a resident of Alabama, it’s essential to understand the debt collection laws so you know your rights if a collection agency decides to pursue you for debt. Alabam abides by federal debt collection laws, namely the Fair Debt Collection Practices Act, which protects its residents from sketchy debt collectors. If you’ve been sued for debt in Alabama, SoloSuit can help you respond to the lawsuit and stand up for your rights.

Money makes the world go round. Without it, you’d likely have trouble paying for the things you need, like a place to live and groceries. America isn’t a cash-based society; most people use some form of debt, like mortgages, car loans, and credit cards, to pay for the things they need or want.

If you keep up with your regular payments in Alabama, you’re unlikely to encounter any issues with your creditors. However, if something happens that prevents you from paying your creditors, you’ll run into problems. Eventually, they may give up on you and sell your debts to a collection agency.

Collection agencies aren’t known for being exceptionally forgiving. When they get hold of an unpaid debt, they’ll ratchet up the collection efforts, and you’ll likely start receiving letters and phone calls.

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Alabama recognizes the Fair Debt Collection Practices Act (FDCPA)

Some states offer additional protections to consumers who find their debts placed with collection agencies, but Alabama isn’t one of them. Instead, debt collectors are subject to the Fair Debt Collection Practices Act (FDCPA), which is federal legislation that applies to all 50 states.

Under the FDCPA, debt collectors cannot take any of the following actions:

  • Call at abnormal times, like before 8 a.m. or after 9 p.m. in your time zone.
  • Continue to contact you regarding a debt if they know you have an attorney handling the matter.
  • Publish your name in a list of people who allegedly owe unpaid debts.
  • Call you multiple times throughout the day in an attempt to harass you.
  • Misrepresent who they are or imply they are a lawyer or law enforcement officer if they aren’t.
  • Imply that you’re committing a crime by not paying your debt.
  • Use letterhead or other templates that appear to be legal processes when they’re not.
  • Refuse to identify who they are or the company they work for.
  • Deposit a postdated check before the date on the check.
  • Tell you they’ll steal your prized espresso machine if you don’t pay your bill.

While the last one isn’t technically part of the FDCPA, we threw it in because NO ONE wants to lose their favorite coffee maker, especially to a debt collector.

Alabama’s statute of limitations on debt protects you

You probably want to know what the debt collector will do if you don’t pay your bill. The answer is that it depends. If you owe more than a few hundred dollars, the collection agency may decide to take your case to court, especially if you don’t respond to its communications.

However, a collection agency can only sue you if the debt isn’t time-barred. The statute of limitations for debts in Alabama is as follows:

Statute of Limitations on Debt in Alabama

Debt Type Deadline
Credit Card 3 years
Medical 6 years
Student Loan 6 years
Auto Loan 6 years
Mortgage 6 years
Personal Loan 6 years
Judgment 20 years
Ala. Code § 6-2-32, § 6-2-34, and § 6-2-37

Even if a debt is past the statute of limitations, that doesn’t mean you don’t owe the money. The collection agency can still call you and send you letters but can no longer take you to court.

Ask the collection agency to validate your debt

If a collection agency contacts you regarding a debt, pay attention to the communication. The FDCPA grants you 30 days to request a validation of the obligation. If you don’t take advantage of this opportunity, the collection agency can assume the debt is valid and continue its collection efforts.

In your validation letter, you can ask the collection agency to prove that it’s the new owner of the debt and provide you supporting evidence of the amount you owe, like a statement from the original creditor. You can also ask it to calculate the age of your debt, which will tell you whether the obligation is time-barred.

Once the collection agency receives your request, it must cease all communications with you until it validates the requested debt. And if it can’t provide the proper documentation, it must stop all collection efforts against you.

Do you need help preparing a Debt Validation Letter? Use SoloSuit’s Debt Validation Letter template.

A collection agency may sue you in Alabama

If you don’t communicate with a debt collector, it may take its collection efforts to the next level with a debt lawsuit. In Alabama, you have 30 days to respond to a debt lawsuit. You’ll know your debt collector has decided to sue you when you receive a Court Summons and a Complaint.

The Court Summons will provide a hearing date in your local court, and the Complaint will list the amount you owe and other pertinent information about the debt. It’s important to formally respond to the Complaint with an Answer. Otherwise, the collection agency can ask the judge for a default judgment.

A default judgment will allow the collection agency to garnish your wages or freeze your bank account — not a good outcome for you.

Watch SoloSuit explain six tips for drafting an Answer in a debt lawsuit claim:

After you file your Answer, you have some decisions to make. If you believe you can win your case, you should attend the hearing and provide your testimony. However, if the collection agency has a strong claim, it’s best to avoid court and try to settle the debt instead.

Let’s consider an example.

Example: Berry Collections is suing Rodney for an unpaid medical bill with a $2,000 balance. Rodney uses SoloSuit to draft and file an Answer to Berry Collections’s Complaint, but he knows he’s likely to lose the case. He decides to offer Berry Collections a settlement of $1,000 in a lump-sum payment. Berry Collections agrees to Rodney’s offer. Once it receives the money from Rodney, it drops the legal claim.

If a collection agency violates your rights under the FDCPA, take action

While Alabama doesn’t have special debt collection laws, it recognizes the FDCPA. If you feel a collection agency is harassing you or taking other actions that break the rules of the FDCPA, don’t ignore it. Instead, file a complaint with the FTC and the Alabama Attorney General’s Office.

Your complaint can protect you and others from disreputable collection agencies' nefarious activities. It might even lead to the agency facing legal action and monetary penalties.

Do you need help settling a debt before your court date? Try SoloSettle — we’ll handle the debt settlement process for you.

What is SoloSuit?

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You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt.

SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.

>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

>>Read the NPR story on SoloSuit. (We can help you in all 50 states.)

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