Alabama Debt Collection Laws: Wage Garnishment, Statute of Limitations, and Repossession

No collector can garnish your wages in Alabama just because you missed payments. For ordinary consumer debt, a creditor must first sue you, win a judgment, and then get a writ of garnishment from the court before your employer withholds anything. That sequence is where most garnishments are actually won or lost: the majority happen through default judgments entered because the person being sued never answered the summons. If you take one action from this page, answer any lawsuit you receive, even if you believe the debt is too old or not yours.

Wage Garnishment in Alabama: Two Formulas, One Federal Ceiling

Alabama is unusual in running two parallel garnishment regimes, and which one applies depends on the kind of debt behind the judgment.

For general judgment debts, including tort judgments, Ala. Code 6-10-7 exempts 75 percent of wages and directs the garnishee, meaning your employer, to withhold the remaining 25 percent. The statute's own text states no minimum-wage floor.

For consumer credit transactions, Ala. Code 5-19-15 uses the federal-style test: the garnishment cannot exceed the lesser of 25 percent of your disposable earnings for the week, or the amount by which those disposable earnings exceed 30 times the federal minimum hourly wage. At the current $7.25 federal minimum wage, that 30-times floor is $217.50 per week. If your weekly disposable earnings are at or below that figure, nothing can be taken.

In practice the federal Consumer Credit Protection Act, 15 U.S.C. 1673, operates as a ceiling on every state, so even a judgment enforced under the flat 6-10-7 formula cannot lawfully reach wages the federal 25%/30-times test protects. Disposable earnings means what is left after legally required withholdings such as taxes and Social Security. Voluntary deductions like insurance premiums or 401(k) contributions do not reduce the figure.

A few Alabama-specific points worth knowing:

• Alabama has no general head-of-household wage exemption. Some websites claim otherwise, but no such statute appears in the current code for ordinary consumer-debt garnishment.
• Alabama's protection against being fired over a garnishment is the federal one: 15 U.S.C. 1674 bars discharge for a garnishment on any one debt. We could not locate an Alabama statute extending that protection to multiple garnishments, so a second garnishment for a different debt carries no clear firing protection in this state.
• The Alabama Department of Revenue collects unpaid state taxes on a different track: its wage garnishments take 25 percent of gross wages, not disposable earnings, and its bank garnishments can reach the full account balance up to the tax owed.

How to claim exemptions

Alabama's main exemption for personal property is Ala. Code 6-10-6: $7,500 of personal property, selected by the debtor. It is a resident-wide exemption, not limited to heads of family, and by its own terms it excludes wages, salaries, and other compensation. To assert it against a garnishment or levy on other property, you file a claim of exemption with the court that issued the process, identifying the property you select. Because wages are excluded, the practical wage protections are the percentage limits above, which apply automatically through the writ itself. If your employer is withholding more than the formula allows, you can move the court to correct the writ.

Bank Account Protections

Once wages land in a bank account, the wage-garnishment percentages no longer protect them as such. What you have instead:

• The $7,500 personal property exemption under 6-10-6 can be claimed over money in a bank account, since it covers personal property generally and bank deposits are not wages once paid.
• Federal benefits have their own shield. Social Security, VA, and similar federal benefits that arrive by direct deposit are automatically protected up to the last two months of deposits under federal rule 31 CFR Part 212. The bank must run that protection itself, and you do not need to file anything to access the protected amount. Benefits deposited by paper check do not get the automatic version and must be claimed as exempt through the court.

For state tax debts, note again that ALDOR's bank garnishment reaches the balance up to the liability, so the timing of an exemption claim matters.

Statute of Limitations on Debt in Alabama

Alabama splits debt lawsuits into buckets with very different deadlines:

The open-account clock runs from the date of the last item on the account or from when the account became due. Credit card debt is commonly treated by courts applying Alabama law as an open account subject to the 3-year period, on the reasoning that the amount owed is not fixed in advance, though the characterization can be contested in a given case and the outcome may depend on the cardholder agreement. Alabama does not give purely oral contracts a shorter general period; they appear to fall under the 6-year catch-all in 6-2-34 unless they qualify as open accounts.

The revival rule: Alabama is stricter than most

Ala. Code 6-2-16 is explicit: no act, promise, or acknowledgment removes the bar of the statute of limitations except a partial payment made on the contract before the bar is complete, or an unconditional promise in writing signed by the party to be charged. Two consequences follow. First, a partial payment made while the clock is still running restarts it, which means a small payment on a 2.5-year-old open account buys the collector three more years. Second, once the period has fully expired, no payment and no oral statement revives it. Only a signed written unconditional promise can do that, so be careful what you sign.

Time-barred does not mean erased. A collector may still ask you to pay a time-barred debt, but under federal Regulation F, 12 CFR 1006.26, a debt collector must not sue or threaten to sue you on it. Credit reporting also runs on its own clock: negative items generally fall off after about seven years regardless of the limitations period.

What Debt Collectors Can and Cannot Do

The federal Fair Debt Collection Practices Act applies fully in Alabama. Third-party collectors cannot use false, deceptive, or misleading representations, including misstating the amount or legal status of a debt, and cannot threaten action they cannot legally take, 15 U.S.C. 1692e. Regulation F adds concrete rules on call frequency and the validation information collectors must give you.

Alabama has no comprehensive state-level consumer debt collection act layered on top of the FDCPA, so the federal statute is the main line of defense. Complaints can be filed with the CFPB and the Alabama Attorney General's consumer protection office.

Car Repossession Rules

Alabama adopted the Uniform Commercial Code's self-help rule as Ala. Code 7-9A-609. After default, a secured lender may take possession of the collateral without any court order, but only if it can do so without a breach of the peace. If you or someone at the scene objects and the repo agent proceeds anyway, or the agent breaks into a locked garage, the repossession can cross that line, though Alabama's statute does not define breach of the peace and courts decide it case by case.

Alabama has no statutory right-to-cure notice requirement before repossession of the kind some states impose, so a lender generally does not have to warn you or give you a fixed window to catch up before taking the vehicle. After repossession, the sale of the car must be commercially reasonable, the proceeds are applied to the debt, and you can be sued for any remaining deficiency. You are entitled to a written explanation of how a deficiency was calculated on request.

Servicemembers have an extra federal layer: for contracts entered before military service, the Servicemembers Civil Relief Act, 50 U.S.C. 3952, requires a court order before repossession.

If You Are Being Garnished or Sued in Alabama

Work the problem in this order:

1. Answer the lawsuit. A garnishment almost always starts with a default judgment. Filing an answer, even a simple one disputing the amount, forces the collector to prove its case and often opens the door to settlement.
2. Check the math on any garnishment. Compare the withholding against the 5-19-15 or 6-10-7 formula and the federal floor. Errors are common.
3. Claim your exemptions promptly. The $7,500 personal property exemption and federal benefit protections do most of their work only when asserted, and deadlines to respond to a garnishment or levy are short.
4. Ask whether the debt is time-barred. If the last activity on an open account is more than three years old, raise the statute of limitations as a defense in your answer. It is a defense you must raise; the court will not raise it for you.
5. Consider bankruptcy if the debt is unpayable. A bankruptcy filing stops garnishment through the automatic stay, and Alabama's exemptions apply inside bankruptcy too. It is not the right tool for everyone, but for people facing multiple judgments it is often the only complete one.

Information last verified on 2026-08-12. This article has not yet been reviewed by a licensed lawyer.

Related Resources

• Debt Collection Laws by State
• How to Stop Wage Garnishment
• Statute of Limitations on Debt
• Can Social Security Be Garnished?
• Alabama Statute of Limitations
• Alabama Bankruptcy Laws

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Last updated: 2026-08-12.