Question 1

What is the statute of limitations on debt in Alabama?

Accepted Answer

6 years for actions founded on promises in writing not under seal, such as a signed loan or credit agreement.

Question 2

How long can a creditor sue on a credit card debt in Alabama?

Accepted Answer

3 years for claims on an open or unliquidated account, counted from the last item on the account or from when the account is due. Claims for money due on a loan or on a stated (agreed) or liquidated account have 6 years. Which period applies to a credit card debt depends on the account and how the claim is brought.

Question 3

Does making a payment restart the statute of limitations in Alabama?

Accepted Answer

Yes, in two cases only: a partial payment on the debt made by the debtor before the limitations period runs out, or an unconditional promise to pay in writing signed by the debtor. No other act, promise or acknowledgment restarts the period.

Question 4

How long does a court judgment last in Alabama?

Accepted Answer

A judgment is presumed paid if 10 years pass from its entry (or from the last execution) without an execution being issued, and no execution can issue on a judgment more than 10 years old until it is revived by motion or action. No judgment can be revived after 20 years from its entry.

Question 5

How much of my wages can be garnished in Alabama?

Accepted Answer

75% of wages are exempt from garnishment for ordinary debts, so no more than 25% can be withheld. For debts from a consumer credit transaction (consumer loans and credit sales), garnishment is limited to the lesser of 25% of weekly disposable earnings or the amount above 30 times the federal minimum hourly wage, and wages cannot be garnished before judgment.

Question 6

How much money in a bank account is protected from creditors in Alabama?

Accepted Answer

No separate bank account exemption. Money in a bank account can be claimed as exempt under the general personal property exemption ($9,400 for exemptions claimed on or after April 1, 2024; the statute's base figure is $7,500, adjusted for inflation every 3 years). Exempt federal benefits keep their protection under federal law.

Question 7

What is the homestead exemption in Alabama?

Accepted Answer

$18,800 for exemptions claimed on or after April 1, 2024 (statutory base $15,000, adjusted for inflation every 3 years), covering a home of up to 160 acres, including a mobile home used as a principal residence. A 2026 amendment sets a higher figure of $56,400 for a resident who is 62 or older or has a disability. Joint owners may each claim the exemption.

Question 8

Can a creditor take my car in Alabama?

Accepted Answer

No separate motor vehicle exemption amount in the general exemption statute. A vehicle may be claimed under the general personal property exemption ($9,400 for exemptions claimed on or after April 1, 2024), which covers personal property the debtor selects.

Question 9

Do debt collectors need a license in Alabama?

Accepted Answer

Alabama law requires each collection agency to pay a state license tax ($100 in cities of 20,000 or more people, $25 in smaller towns). The tax does not apply to businesses excluded from the federal FDCPA definition of 'debt collector'.

Question 10

What is the maximum legal interest rate in Alabama?

Accepted Answer

A money judgment based on a contract bears interest at the rate stated in the contract. All other judgments bear interest at 7.5% per year.

Question 11

How do I respond to a debt collection lawsuit in Alabama?

Accepted Answer

Most consumer debt suits are filed in District Court. In a small claims case (up to $6,000), the defendant must file a written answer (form SM-3) with the court clerk within 14 days after being served. A defendant who does not answer risks a default judgment.

Question 12

How do I stop a garnishment or claim an exemption in Alabama?

Accepted Answer

When money or personal property is garnished, the debtor files a written claim of exemption, sworn under oath, in the court where the case is pending, with a statement listing the property, its location and value. If the debtor has notice of the garnishment, the claim must be filed before the court enters a judgment of condemnation (the order releasing the money to the creditor). When property is levied on, the claim can be filed with the levying officer any time before the sale; if the creditor does not contest within 10 days after notice, the levy is discharged.

Question 13

Which bankruptcy exemptions can I use in Alabama?

Accepted Answer

Alabama has opted out of the federal exemptions. A debtor in bankruptcy may use only Alabama exemptions plus federal non-bankruptcy exemptions.

Time limit to sue on a written contract	6 years for actions founded on promises in writing not under seal, such as a signed loan or credit agreement. Sealed instruments have a longer period (§ 6-2-33). Source: Ala. Code § 6-2-34(4)
Time limit for credit cards and open accounts	3 years for claims on an open or unliquidated account, counted from the last item on the account or from when the account is due. Claims for money due on a loan or on a stated (agreed) or liquidated account have 6 years. Which period applies to a credit card debt depends on the account and how the claim is brought. § 6-2-34: https://alison.legislature.state.al.us/code-of-alabama?section=6-2-34 Source: Ala. Code § 6-2-37(1); § 6-2-34(5)
Can a payment restart the clock?	Yes, in two cases only: a partial payment on the debt made by the debtor before the limitations period runs out, or an unconditional promise to pay in writing signed by the debtor. No other act, promise or acknowledgment restarts the period. Source: Ala. Code § 6-2-16
How long a judgment lasts	A judgment is presumed paid if 10 years pass from its entry (or from the last execution) without an execution being issued, and no execution can issue on a judgment more than 10 years old until it is revived by motion or action. No judgment can be revived after 20 years from its entry. Source: Ala. Code §§ 6-9-190, 6-9-191, 6-9-192

Wage garnishment limit	75% of wages are exempt from garnishment for ordinary debts, so no more than 25% can be withheld. For debts from a consumer credit transaction (consumer loans and credit sales), garnishment is limited to the lesser of 25% of weekly disposable earnings or the amount above 30 times the federal minimum hourly wage, and wages cannot be garnished before judgment. § 5-19-15: https://alison.legislature.state.al.us/code-of-alabama?section=5-19-15 Source: Ala. Code § 6-10-7; § 5-19-15
Money protected in a bank account	No separate bank account exemption. Money in a bank account can be claimed as exempt under the general personal property exemption ($9,400 for exemptions claimed on or after April 1, 2024; the statute's base figure is $7,500, adjusted for inflation every 3 years). Exempt federal benefits keep their protection under federal law. § 6-10-6 text: https://alison.legislature.state.al.us/code-of-alabama?section=6-10-6. The adjusted amount is from the federal bankruptcy court's table; the State Treasurer publishes the adjustments under § 6-10-12. Source: Ala. Code §§ 6-10-6, 6-10-12, 6-10-37; U.S. Bankruptcy Court, S.D. Ala., Alabama exemption amounts
Homestead exemption	$18,800 for exemptions claimed on or after April 1, 2024 (statutory base $15,000, adjusted for inflation every 3 years), covering a home of up to 160 acres, including a mobile home used as a principal residence. A 2026 amendment sets a higher figure of $56,400 for a resident who is 62 or older or has a disability. Joint owners may each claim the exemption. Adjusted figures: https://www.alsb.uscourts.gov/node/1487. Whether the $56,400 figure is itself subject to the 3-year inflation adjustment, and the exact effective date of Act 2026-203, were not confirmed from an official source. Source: Ala. Code §§ 6-10-2 (as amended by Act 2026-203), 6-10-12; U.S. Bankruptcy Court, S.D. Ala., Alabama exemption amounts
Vehicle exemption	No separate motor vehicle exemption amount in the general exemption statute. A vehicle may be claimed under the general personal property exemption ($9,400 for exemptions claimed on or after April 1, 2024), which covers personal property the debtor selects. Adjusted figure: https://www.alsb.uscourts.gov/node/1487 Source: Ala. Code § 6-10-6; U.S. Bankruptcy Court, S.D. Ala., Alabama exemption amounts
Claiming an exemption	When money or personal property is garnished, the debtor files a written claim of exemption, sworn under oath, in the court where the case is pending, with a statement listing the property, its location and value. If the debtor has notice of the garnishment, the claim must be filed before the court enters a judgment of condemnation (the order releasing the money to the creditor). When property is levied on, the claim can be filed with the levying officer any time before the sale; if the creditor does not contest within 10 days after notice, the levy is discharged. § 6-10-26: https://alison.legislature.state.al.us/code-of-alabama?section=6-10-26. Notice of the garnishment must be served at least 5 days before any judgment of condemnation. Source: Ala. Code §§ 6-10-37, 6-10-26
Bankruptcy exemptions	Alabama has opted out of the federal exemptions. A debtor in bankruptcy may use only Alabama exemptions plus federal non-bankruptcy exemptions. Source: Ala. Code § 6-10-11

Debt collector licensing	Alabama law requires each collection agency to pay a state license tax ($100 in cities of 20,000 or more people, $25 in smaller towns). The tax does not apply to businesses excluded from the federal FDCPA definition of 'debt collector'. This is a revenue license tax. No separate state agency licensing and conduct-oversight program for collectors was identified. Source: Ala. Code § 40-12-80
Interest rate limits	A money judgment based on a contract bears interest at the rate stated in the contract. All other judgments bear interest at 7.5% per year. Applies to judgments entered on and after September 1, 2011. Source: Ala. Code § 8-8-10

Alabama Debt Collection Laws: Time Limits, Garnishment and Your Rights

Quick answers for Alabama

Time limits

If you are sued

Garnishment and what creditors can't take

Debt collectors and interest

Where to get help in Alabama

Debt & Collections FAQ

More Alabama law