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Alabama Collection Laws

Here are some relevant federal and state laws that were in effect as of 2021:

1. Fair Debt Collection Practices Act (FDCPA): This federal law prohibits debt collectors from using abusive, unfair, or deceptive practices to collect debts from consumers. It sets rules on when and how collectors can contact consumers, what they must disclose, and gives consumers certain rights in disputing and obtaining information about the debt.
2. Fair Credit Reporting Act (FCRA): This federal law regulates the collection, dissemination, and use of consumer credit information. It provides consumers with the right to access and correct errors in their credit reports.
3. Alabama State Statute of Limitations: In Alabama, like other states, there is a time limit for when creditors can sue consumers for unpaid debt. As of 2021, the statute of limitations for open-ended accounts, such as credit cards, was three years, and for written contracts, it was six years. However, these limitations can change, and various factors can affect the calculation of these time periods, so it’s essential to verify the current laws.
4. Alabama Exemption Laws: Alabama has exemption laws that protect certain types of property from being taken by creditors to satisfy a judgment. For example, Alabama may allow you to exempt a certain amount of equity in your home, car, or other personal property.
5. Garnishment Laws in Alabama: If a creditor obtains a court judgment against you, they might be able to garnish your wages or bank account to collect the debt. Alabama has laws that limit the amount that can be garnished and protect certain types of income, such as Social Security benefits, from garnishment.
6. Alabama Mini-FDCPA: Some states have enacted their versions of the FDCPA that may provide additional protections or remedies for consumers. As of my last knowledge update, Alabama did not have a state-specific version of the FDCPA. It’s essential to check if this has changed.

Since laws and regulations change, and because individual circumstances can vary, it’s important to consult a lawyer or legal advisor for specific advice on debt collection issues. Please ensure that you are referring to the most current legal information or consulting a legal expert in Alabama for the latest details on debt collection laws in the state.

Important information about Alabama:

A complete list of federal laws to be followed by all collection agencies in USA are listed here: Debt collection laws

• 75% of wages are exempt from garnishment.
• Alabama debt collection agency can collect all across the state including these cities Birmingham, Montgomery, Huntsville, Mobile, Tuscaloosa, Hoover, Dothan, Decatur, Auburn and Gasden.
• You should hire a collection agency with extensive experience of collecting in the state and a complete understanding of Alabama collection laws.
• The average Alabama resident has a credit card debt of $9300.
• The average mortgage debt in Alabama is $141,000
• Median annual household income of $48,123
• Alabama’s population is about 4,900,000
• An average college graduate is carrying about $31,000 in debt
• Per capita auto loan debt: $4,780

Selecting a Collection Agency in Alabama.

• Debt collectors should be well trained to follow Federal and Alabama debt collection laws.
• Select a collection agency that can handle both Big and Small clients.
• Should be able to do collections in English and Spanish.
• Should offer both Flat Fee and Contingency Collection Services.
• Provide an online client portal to submit new accounts and to stop the service when needed.
• Should have collection experts for your industry.
• Report debts to Credit Bureaus if requested by the client.