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Alabama Collection Laws

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UpdatedMay 14, 2024
Key Takeaways:
  • Alabama allows wage garnishment and account levies.
  • The Alabama statute of limitations on credit card debt is 3 years.
  • Consult with an attorney to learn more about your rights and liabilities.

What rights do creditors have under Alabama law to collect debts from consumers?

I owe money to a creditor in Alabama. What can the creditor do to try to collect the account from me?

A collection agent or law firm that owns a collection account is a creditor. A creditor has several legal means of collecting a debt. But before the creditor can start, the creditor must go to court to receive a judgment. See the resource Served Summons and Complaint to learn more about this process.

The court may decide to grant a judgment to the creditor. A judgment is a declaration by a court that the creditor has the legal right to demand a wage garnishment, a levy on the debtor's bank accounts, and a lien on the debtor's property. A creditor that is granted a judgment is called a "judgment-creditor." Which of these tools the creditor will use depends on the circumstances. We discuss each of these remedies below.

Alabama Wage Garnishment

The most common method used by judgment-creditors to enforce judgments is wage garnishment. A judgment-creditor contacts your employer and requires the employer to deduct a certain portion of your wages each pay period and send the money to the creditor.

Know Your Rights - Wage Garnishments

In most states, creditors may garnish between 10% and 25% of your wages, with the percentage allowed determined by state law. Garnishment of Social Security benefits or pensions for consumer debt is not allowed under federal law, but may be allowed for child support. See the Wage Garnishment article to learn more.

Alabama garnishment rules are found in Title 5 (Section 5-19-5). In general, Alabama follows the federal rules for the amount of a garnishment, which allows up to 25% of a worker's wages to be garnished. See the Dept. of Labor's Employment Law Guide - Wage Garnishment and the Dept. of the Treasury's Answers About Garnishments. Municipal and state employees may be garnished.

Generally, 401k or other retirement funds are exempt from garnishment. It is advisable to have those funds specifically deposited into a separate bank account to ensure financial accounting if you are concerned with a garnishment on those payments.

Levy Bank Accounts

A levy means that the creditor has the right to take whatever money in a debtor's account and apply the funds to the balance of the judgment. Again, the procedure for levying bank accounts, as well as what amount, if any, a debtor can claim as exempt from the levy, is governed by state law. Many states exempt certain amounts and certain types of funds from bank levies, so a debtor should review his or her state's laws to find if a bank account can be levied. In some states levy is called attachment or account garnishment. The names may vary but the concept is the same.

In Alabama, administrative levy is allowed under for recovery of taxes and unpaid child support. In Alabama, levy of bank accounts is called garnishment. offers online court forms a consumer can complete to request to stop a garnishment of a bank account.

If you reside in another state, see the Account Levy resource to learn more about the general rules for this remedy.


A lien is an encumbrance -- a claim -- on a property. For example, if the debtor owns a home, a creditor with a judgment has the right to place a lien on the home, meaning that if the debtor sells or refinance the home, the debtor will be required to pay the judgment out of the proceeds of the sale or refinance. If the amount of the judgment is more than the amount of equity in your home, then the lien may prevent the debtor from selling or refinancing until the debtor can pay off the judgment.

Alabama laws governing liens are Title 35, Chapter 11. Under Section 6-9-211, "Every judgment, a certificate of which has been filed as provided in Section 6-9-210, shall be a lien in the county where filed on all property of the defendant which is subject to levy and sale under execution, and such lien shall continue for 10 years after the date of such judgment..." Mechanics and contractors (and similar laborers and professionals) have the right to place a lien on a property.

If you reside in another state, see the Liens & How to Resolve Them article to learn more.

Alabama Statutes of Limitations

Each state has is own statute of limitations. The statute of limitations for Alabama is found in Title 6, Chapter 2. The statute of limitations for open accounts (credit cards) is 3 years (Section 6-2-37), written contracts are 6 or 10 years depending on the circumstances (Section 6-2-33 and 6-2-34), and spoken contracts are 6 years. An Alabama judgment is valid for 10 years, and can be revived for another 10 years (Section 6-9-191 and 6-9-192).

Know Your Rights - Stop Unscrupulous Debt Collectors

Collection agents violate the FDCPA if they file a debt collection lawsuit against a consumer after the statute of limitation expired (Kimber v. Federal Financial Corp. 668 F.Supp. 1480 (1987) and Basile v. Blatt, Hasenmiller, Liebsker & Moore LLC, 632 F. Supp. 2d 842, 845 (2009)). Unscrupulous collection agents sue in hopes the consumer will not know this rule.

Alabama Foreclosure

See the resource Alabama foreclosure to learn more about the rules surrounding foreclosure in this state.


Consult with an Alabama attorney experienced in civil litigation to get precise answers to your questions about liens, levies, and garnishment in Alabama.

I hope this information helps you Find. Learn & Save.



Did you know?

If you are struggling with debt, you are not alone. According to the NY Federal Reserve total household debt as of Quarter Q4 2023 was $17.503 trillion. Student loan debt was $1.601 trillion and credit card debt was $1.129 trillion.

A significant percentage of people in the US are struggling with monthly payments and about 26% of households in the United States have debt in collections. According to data gathered by from a sample of credit reports, the median debt in collections is $1,739. Credit card debt is prevalent and 3% have delinquent or derogatory card debt. The median debt in collections is $422.

The amount of debt and debt in collections vary by state. For example, in New Mexico, 32% have any kind of debt in collections and the median debt in collections is $1651. Medical debt is common and 16% have that in collections. The median medical debt in collections is $700.

While many households can comfortably pay off their debt, it is clear that many people are struggling with debt. Make sure that you analyze your situation and find the best debt payoff solutions to match your situation.



SScott Ayers, Oct, 2020

In 2000 I had a judgment against me for a accident. They took my DL. Is it still active or is not held against me anymore and can get my DL back. Please help with this.

DDaniel Cohen, Oct, 2020

Scott, go to the DMV and see what happens. I don't know the policy in Alabama. It could very well be that unless you addressed the underlying issue of the judgment as you were supposed to, then you can't get your license. It could also be the case that it was so long ago that even if the policy would prevent you from getting your license, the system may not have recorded everything and the red flag in your file may be gone.

Bottom line: The only way of finding out for sure is to speak with the DMV.

CCrystal Cagle, Apr, 2020

If a bill collector sues for hospital bills do they have to send me a subpoena?

DDaniel Cohen, Apr, 2020

Crystal, I am not a lawyer, so the information I share is not to be considered legal advice.

A creditor or collection ageny is required to follow rules when suing you. They are to notify you. It is not a subpeona, but a summons that you will receive. 

Here is information about the service of process from the Alabama Judicial System.

DD, Mar, 2020

If an account is sold to another debt collector in 2009 and you have not heard from the debt collector until you go to use your bank card to find out your bank account has been wiped out by the debt collector and you was not served or heard from the debt collector since 2009.

DDaniel Cohen, Mar, 2020

You didn't ask a question, so I will make a few observations assuming that you are asking, "How could this happen and what can I do?"

It appears a default judgment was issued against you. That means you were sued and, when you did not appear, the judge ruled against you. I understand that you said you were never served notice of the lawsuit. There are rules on how you were to be served notice of the suit specific to Alabama. 

You need to determine when the judgment was entered, what claims were made about serving notice to you, whether you would have been allowed to use the statute of limitations on debt as a defense to avoid paying, and whether this is something that can be challenged at this point.

I recommend consulting with an attorney to understand your options.

BBob, Mar, 2020

My brother conned our mother out of $100,000 between 2009 and 2018. I am the executor of the will. The will states that we are to divide remaining assets equally between the 3 of us. Can I apply the money he stole from my mother against his share? Can I have him arrested for elder abuse? Can I turn him into the IRS for failure to pay taxes on the sale of stocks and bonds that were a part of our inheritance?

DDaniel Cohen, Mar, 2020

Bob, your questions are heavy ones. It's not just due to the amount of money at stake, but turning in a brother for a criminal investigation or to the IRS is extremely serious with potentially huge implications.

There may be a statute of limitations that would make the conduct in 2009 and some other years beyond the reach of the law. Recent years would not have that restriction. My best advice is to speakw with an attorney? Is there one who is helping with the probate of the estate?

I strongly urge you not to take unilateral action as the executor that benefits you financially. Make sure a lawyer is involved.



TT, Feb, 2020

If a bank account is levied does alabama protect a thousand dollars under wild card? Do you have to file backtrupcy for it?

DDaniel Cohen, Feb, 2020

Doing some research, it appears that the exemptions have changed. Call after reviewing the dollar amounts listed here. You will find their phone number on the page to which I linked. They say that the exemption for personal property, including bank account, is $7,750, for a single person and double for a married couple.

You do not need to file for bankruptcy to be eligible for the exemption.