How to Get Debt Relief in Alabama

Sarah Edwards | March 03, 2023

Legal Expert
Sarah Edwards, BS

Sarah Edwards 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

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.

SoloSuit is on its way to rescue you from debt

Summary: If you're struggling with debt in Alabama, SoloSuit can help you find the relief you need.

If you're drowning in debt in Alabama, you're not the only one. Individuals living in Birmingham, Alabama, carry an average of $9,473 in credit card debt. While the state boasts a relatively low cost-of-living index of 87.9, it hasn't been immune to the dramatic increases in inflation and home costs that the nation has experienced over the past year.

Since last year, home prices have risen by 18.3%. This has priced many potential homebuyers out of the market for now. Instead, they are stuck in rental homes or apartments that can increase their monthly rents on a whim. While the cost of living in Alabama may be less than in other, much more expensive states, such as Hawaii, Alabama is not known for high salaries.

The national average salary in the United States is $58,260. The average salary in Alabama is $48,110. Individuals and families with limited incomes may find themselves struggling to get by and pay for their rent, food, and transportation. Paying off debt may seem like a far-off dream.

However, there are a variety of protections and debt relief options for those living in Alabama. A combination of both can help Alabamans eliminate their debt and obtain a new lease on life.

What federal debt protections are available for Alabama residents?

The main protection provided by the federal government for Alabama residents is the Fair Debt Collection Practices Act (FDCPA). This act prohibits creditors and debt collection agencies from engaging in certain practices with the intent to collect a debt. For example, under the FDCPA, debt collectors are prohibited from:

Letting your phone ring “off the hook”
Pretending to be someone else when attempting to collect a debt
Calling you at inopportune times, such as before 8 a.m. or after 9 p.m.
Inaccurately telling a debtor that they have committed a crime
Indicating that their debt collection letters are a legal process
Discussing your debt with your family members or friends
Calling at work when your employer prohibits such communications
Using crude or obscene language to coerce you to pay off a debt

While these are just a few examples of illegal collection tactics, there are a wide array of methods that are barred under the FDCPA. If you feel that a debt collector is harassing or abusing you, it's important to file a complaint with the Consumer Financial Protection Bureau.

How does Alabama state law protect consumers?

The main protection offered to Alabama consumers is the statute of limitations. Each state has a set of restrictions in place that bars creditors from taking legal action against a consumer after a certain period of time has passed. Here's a breakdown of Alabama's statute of limitations laws:

Alabama Statute of limitations on debt
Type of debt	Statute of limitations
Mortgage and medical	6 years
Credit card	3 years
Auto loan	4 years
State tax	3 years
Source: FindLaw

Once a debt has passed the time limit imposed by the statute of limitations, no legal action may be taken by the creditor or debt collection agency, as the debt is considered time-barred. However, that does not mean the debt is invalid. The creditor may still continue to pursue the collection of the debt via phone or email. If the consumer makes a payment towards the debt or confirms the debt is valid, the statute of limitations will restart.

What debt relief programs are available to Alabama residents?

For those seeking to obtain debt relief in Alabama, there are several options available. Debt consolidation loans and debt settlement programs are the most common. In some cases, bankruptcy may be an option.

Option 1 – a debt consolidation loan

Those with a decent credit score of at least 650 may qualify for a debt consolidation loan. This type of loan provides you with enough money to pay off all of your creditors at once, usually with a relatively low interest rate. In return, you'll make monthly repayments to your new loan provider.

The advantages of a debt consolidation loan include paying less interest and becoming debt-free in a shorter period of time than you would if you continued to make only minimum payments. In addition, these programs won't have a negative impact on your credit score. making it easier to qualify for a mortgage or a new loan in the future.

Option 2 — the debt settlement process

Debt settlement involves negotiating with your creditors for a reduced balance on your overall loan. For example, if you currently owe $5,000 to a creditor, you could seek to reduce your balance to $2,500 and pay them off. You can attempt to settle your debts on your own or with the assistance of a debt settlement agency.

If you decide to settle your debts on your own, you'll need to do some research on effective methods for settling your debts. In some cases, it may be possible to exchange your payment for deletion of the account from your credit report. This can potentially improve your credit score. You can use SoloSettle to start the debt settlement process and avoid going to court.

SoloSettle is a tech-based approach to debt settlement. Our software helps you send and receive settlement offers until an agreement is reached with your creditor or debt collector.

Settle with SoloSettle

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Original creditors will usually settle for 20%-70% the original amount, while debt collectors may settle for anywhere between 1%–60% of the debt. To learn more about how to negotiate a settlement that works best for you, check out this video from SoloSuit:

Working with a debt settlement agency has its own benefits. Since they are knowledgeable and familiar with many creditors and debt collection agencies, they are often in a good position to negotiate significant reductions for you. However, you will pay a price for their services—sometimes up to 25% of the debt that you owe. You may also experience negative marks on your credit report, which can reduce your ability to obtain a loan in the future.

Should I consider bankruptcy?

Bankruptcy should be considered as a last resort. Declaring a Chapter 7 bankruptcy will wipe out most consumer debts without you needing to repay them, but you will be hampered in your ability to rent an apartment or obtain credit for some time. In addition, you will need to meet certain income restrictions in order to qualify.

A Chapter 13 bankruptcy can eliminate some debts, but others will not be forgiven. You'll need to make monthly payments for a certain period of time before the debts are wiped from your financial slate. Chapter 13 bankruptcies are best for those who don't qualify for Chapter 7 or have certain assets, such as a home, that they want to protect.

Are you being sued for a debt in Alabama?

Being sued for a debt is no one's idea of fun. However, it does happen. If you are the subject of a debt collection lawsuit, consider using SoloSuit to file your answer. Our free web app provides you with the documentation you need to file in your local courts. If you prefer the assistance of a lawyer, we offer a paid option as well.

What is SoloSuit?

SoloSuit makes it easy to respond to a debt collection lawsuit.

How it works: SoloSuit is a step-by-step web-app that asks you all the necessary questions to complete your answer. Upon completion, you can either print the completed forms and mail in the hard copies to the courts or you can pay SoloSuit to file it for you and to have an attorney review the document.

Respond with SoloSuit

"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James

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