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Collection agency rules state of Alabama

Collection Agency Laws & Licensing Requirements

   There are no licensing or bond requirements for governing collection activities in Alabama. However, there is a license tax that must be paid to the town and/or city location where the collection agency's place of business is.


Each collection agency shall pay the following:
License tax

License Tax Information: Alabama Department Of Revenue
$100.00 (towns & cities 20k or more inhabitants)
$25.00 towns and cities of less than 20,000 inhabitants. [C.O.A. 40-12-80]

Attorney General Office Helps Consumers With Debt Collection Violations In Many Cases. Consumers can file complaints online here.

Alabama Deceptive Trade Practices.

Alabama Attorney Bar Locate an Attorney who practices in Alabama, State laws, and Links

Federal Laws:
Alabama follows the
Federal Fair Debt Collection Practices Act
The Federal Debt Collection Law is enforced by
The Federal Trade Commission

If you have a complaint about a Bank or other financial institution (The Federal Reserve System)

Summary Collection Laws: Business License not required for out-of-state agencies. Business License (see exemption) Not Required [per Sctry. of State]. Bond not required. No Regulations, Collector cannot dun spouse [Ex Part Bunting Plastic Surgery Clinic; 624 So.2d 1075 (Ala.Supr.Ct) Aug. 1993]

Interest Rate(s): Legal 6% Judgment 12%

Debt Collection Statute of Limitations:

Open Acct. 3 Years - Written Contract 6 Years - Domestic Judgments 20 Years - Foreign Judgments 20 Years

Bad Check Laws & Civil Penalty: Was Greater of $10.00 or Actual Bank Charges, Now any person who issues a bad check is responsible for payment of the Bad Check Charge of Twenty Five Dollars [$25.00] or an amount equal to the actual charge by the depository institution
C.O.A. 8-8-15. Commencing January 1st, 1999, the Bad Check Charge shall be increased by $1.00 per year until it reaches the maximum charge of $30.00 by January 1st, 2003. See Also Sec 40-29-70.

Maximum Damages for Writing a Bad Check = Up To The Judge.
Statutory Notice: Giving of the Notice and Proceeding.
Statute Of Limitations
Dishonored Notes
Negotiating a Worthless Negotiable Instrument Is A Class a Misdemeanor (Sec. 13A-9-13.1)
Forgery Laws: Title 13A Criminal Code
Signature by Representative
Fines For Misdemeanors & Violations
Fines For Felonies
Theft Related Offenses
Bank Fraud & Swindles

District Attorney's Office
100 South Lawrence Street
Montgomery, AL 36104
How to file on a Worthless Check.

Garnishment & General Exemptions: 75% of Wages exempt from Garnishment

UCC Filings (Searchable Database Online)

Alabama Court System Online

Other Credit and Collection Links

The major laws that govern financial institutions and protect individuals in their financial dealings are:

  • Consumer Credit Protection Act It is the purpose of this title to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit, and to protect the consumer against inaccurate and unfair credit billing and credit card practices.
  • Truth in Lending Act Consumer Credit Costs Disclosures, requires a lender to tell you how much it will cost to borrow money so that you can compare the terms of credit offered by different lenders.
  • Fair Credit and Charge Card Disclosure Act requires a lender offering you a credit card to tell you the annual percentage rate (APR), the amount of any annual fee, and whether you have a grace period to pay your bill before a finance charge is added.
  • Fair Credit Reporting Act controls how your credit history (how you pay your bills) is kept by credit bureaus and used by lenders.
  • Equal Credit Opportunity Act prohibits lenders from discriminating against you in a credit transaction on the basis of certain personal characteristics such as race, color, religion, national origin, sex, marital status, age, because you receive public assistance or because you’ve exercised your rights under the Consumer Credit Protection Act.
  • Fair Debt Collection Practices Act lays out the rules a debt collector must follow when trying to collect a debt from a consumer.
  • Home Equity Loan Consumer Protection Act requires a lender to give you complete information about the home equity loan plan it offers—first when you receive an application and again before you first use the line of credit.
  • The Home Ownership and Equity Protection Act requires disclosures and imposes substantive limitations on mortgage transactions having rates or fees above a certain percentage or amount. It also requires disclosures about the potential costs for reverse mortgages.
  • Fair Housing Act prohibits lenders from discriminating against you in real estate mortgage or home improvement loans on the basis of race, color, religion, national origin, sex, familial status, or handicap.
  • Real Estate Settlement Procedures Act states that lenders must give purchasers information about the costs required to close a mortgage loan. It also protects consumers from unnecessarily high real estate settlement costs by prohibiting certain business practices. This applies when you take out or refinance a loan secured by real estate such as a mortgage loan or a home equity loan.
  • Fair Credit Billing Act requires that a lender promptly correct a mistake on your credit card bill.
  • Expedited Funds Availability Act limits how long a bank may delay your use of the funds you deposit in an account.
  • Truth in Savings Act requires lenders to disclose the terms of their deposit accounts in a uniform way.
  • Electronic Fund Transfer Act limits an individual’s liability if their ATM card is lost or stolen and calls for investigation and correction of errors made to your account.
  • Consumer Leasing Act requires the costs and the terms of a consumer lease, such as a lease for a car or for furniture, be outlined to you so that you can compare the cost of leasing.

Credit and Collection Links

Comptroller of the Currency
Office of the Ombudsman
Customer Assistance Unit
1301 McKinney Street
Suite 3710
Houston, TX 77010
1 (800) 613-6743
    (regulates banks with national in the name or N.A. after the name)

Federal Deposit Insurance Corporation
Compliance and Consumer Affairs
550 17th Street, N.W.
Washington, DC 20429
(202) 942-3100 or 1 (800) 934-3342
    (regulates state chartered banks that are not members of the Federal Reserve System)

Office of Thrift Supervision
Consumer Programs
1700 G Street, N.W.
Washington, DC 20552
(202) 906-6237 or 1 (800) 842-6929
    (regulates federal savings and loans and federal savings banks)

National Credit Union Administration
Office of Public and Congressional Affairs
1775 Duke Street
Alexandria, VA 22314-3428
(703) 518-6330
    (regulates federally chartered credit unions)

Federal Trade Commission
Consumer Response Center
6th and Pennsylvania, N.W.
Washington, DC 20580
877-FTC-HELP – toll free (877-382-4357)
    (regulates finance companies, stores, auto dealers, mortgage companies, and credit

Alabama Debt Collection Laws

Submitted by Brent Yarborough



arzaur & Schwartz, P.C.

Published by The national List of Attorneys

Brent Yarborough is an attorney with the Birmingham law firm of Zarzaur & Schwartz, P.C., where he practices in the areas of collections, creditors’ rights, commercial litigation, and the defense of consumer law claims


He is a frequent speaker and author on topics related to collections and consumer law. Brent earned his B.A. degree, cum laude, from Birmingham - Southern College and his J.D. degree from Cornell University.

Brent serves on the Board of Directors of the National Association of Retail Collection  Attorneys (NARCA), on the executive board of the Birmingham Bar Association’s Bankruptcy and  Commercial Law Section, and on the steering committee of the Central Alabama Financial Education Coalition. Zarzaur & Schwartz, P.C. is a full service creditors’ rights law firm. Located in Birmingham,

Alabama, the firm serves its many local and national clients throughout the State of Alabama, in all courts and jurisdictions. The firm specializes in the areas of commercial collections, consumer collections, medical collections, utility collections, student loan collections, collateral recovery, commercial bankruptcy, consumer bankruptcy, and the defense of consumer law claims. Statute of Limitations & Judgments Collection suits are generally based on breach of contract

or stated account , both of which fall under the six (6) year statute of limitations

provided in Alabama Code Section 6 – 2 - 34.

Actions for open or unliquidated account must be brought within three years.

See Ala. Code § 6 – 2 - 37(1)(1975). Judgments are presumed satisfied ten years after entry or last execution. See Ala. Code § 6 – 9 – 191 (1975)


A judgment may be revived one time, but a judgment cannot be revived after the lapse of twenty years from its entry. See Ala. Code § 6 – 9 – 190 (1975).

Judgments based on contract actions bear interest at the same rate of interest stated in the contract. All other judgments bear interest at the rate of 7.5 percent per annum. See Ala. Code § 8 – 8 – 10 (1975)


Alabama has adopted the Uniform Enforcement of Foreign Judgments Act, which can be found at Ala. Code § 6 – 9 – 230  et seq


Bad Checks

“A person commits the crime of negotiating a worthless negotiable instrument


if the person negotiates or delivers a negotiable instrument for a thing of value and with the intent, knowledge, or expectation that it will not be honored by the drawee.”

Ala. Code § 13A – 9 - 13.1


This is a Class A misdemeanor. Most, if not all, district attorneys maintain a worthless check unit pursuant to Ala. Code § 12 – 17 - 224 (1975).

Alabama law also provides a private cause of action for bad checks. The holder of a worthless check may recover punitive damages, compensatory damages, and a reasonable attorney fee. Ala. Code § 6 – 5 - 285 (1975).

Actions based upon a worthless check must be brought within one year.

Ala. Code § 6 – 5 - 285 (1975).


Garnishment Exemptions

The first 75% of a debtor’s wages are exempt from garnishment. See Ala. Code § 5 – 19 - 15 (1975) and Ala. Code § 6 – 10 – 7 - . Section 6 – 10 - 6 provides a $3,000.00 exemption for personal property, but this exemption specifically does not apply to wages, salaries, or other compensation. On the other hand, Section 204 of Article X of the Alabama Constitution (1901) allows a personal property exemption of

$1,000.00. As a result, some debtors attempt to “ stack” the exemptions found in Sections 5 – 19 - 15 and 6 – 10 - 7 with the exemption found in Section 204 of the Alabama Constitution. That is, they use Sections 6 – 10 - 7 or 5 – 19 - 15 to protect 75% of their wages and then claim that the Alabama Constitution protects an

additional $1,000.00 that is left unprotected by those Code sections. Thus far, the Alabama Court of Civil Appeals has not permitted the “stacking” of these exemptions. Roberts v. Carraway Methodist Medical Center, 591 So.2d 870 (Ala.Civ.App. 1991),established the test for claiming an exemption of wage

garnishments: if the total value of all personal property of the debtor, plus the value of a paycheck, is more than $1,000, then the debtor cannot claim the exemption.

See also Eight Mile Auto Sales, Inc. v. Fair , 25 So.3d 459, 461 (Ala.Civ.App. 2009)

(“’[I]f [defendant’s] declaration and claim of exemption includes any wages, the court will allow [defendant] to include wages and other personal property with a total aggregate value of $1000.00, computed by including 100% of [defendant’s] after tax wages for the pay period pursuant to § 6 – 10 – 7 . .”)

The homestead exemption is $5,000.00, or $10,000.00 when the homestead is jointly owned by a husband and wife. Ala. Code § 6 – 10 - 2 (1975). Licensing & Bonding With respect to debt collector licensing and bonding, Ala. Code § 40 – 12 – 80 imposes a license tax on collection agencies, depending on the size of the town

in which the agency is physically located: 20,000 or more inhabitants - $100; towns and cities of fewer than 20,000 inhabitants - $25 The section defines a

collection agency as follows: “[e]ach person who shall employ agents to solicit claims for collection from  persons, firms, or corporations in the state shall be deemed a collection agency within the meaning of this section.” In an unpublished opinion, the United States District Court for the Northern District of Alabama

held that the statute only applies to co llection agencies with a physical presence (offices, employees, or agents) in Alabama, thus an agency did not violate the FDCPA when it attempted to collect a debt from an Alabama consumer without paying the license tax. Debt buyers are not subject to any additional licensing or bonding requirement s. Also, there are no formal pleading or documentation rules applicable to debt buyers. However, most courts will not enter a judgment without proof of the original debt and a complete chain of title, reflecting each and every

assignment from the original issuer of the account to the current plaintiff. The original debt is generally proved through copies of the original contract, the account application, or account statements.


Assignments can often be proved with a bill of sale for each assignment, though a growing number of judges require proof that the debtor’s specific account was part of the portfolio of accounts assigned. No lawyer may appear in the courts of Alabama unless that lawyer is licensed to practice here, though mechanisms are available for pro hac vice admissions for purposes of one case. To date, the Office of General Counsel of the Alabama State Bar has not issued a formal opinion on whether sending collection letters or making collection phone calls is the practice of law. Door - Closing Statute Pursuant to Ala. Code § 10 - 2B -15.01

(a) “[a] foreign corporation may not transact business in this state until it obtains a certificate of authority from the Secretary of State.” Alabama’s door - closing statute is found at Ala. Code § 10 - 2B - 15.02 (a) and serves to bar nonqualified foreign corporations from enforcing contracts in Alabama courts. However, if the nonqualified corporation’s activities are considered “interstate” rather than “intrastate,” then the corporation is protected from the door - closing statute by the

Commerce Clause of the United States Constitution. See Allstate Leasing Corp. v. Scroggins , 541 So.2d 17 (Ala.Civ.App. 1989) (citing Green Tree Acceptance, Inc. v. Blalock , 525 So.2d 1366 (Ala. 1988)).  The Alabama Court of Civil Appeals has held that a debt buyer’s purchase of chattel paper did not constitute “doing business” within the State of Alabama under the door - closing statute, thus that statute

could not be used as a defense to the debt buyer’s collection suit.

Casa Investments Company v. Boles, 931 So.2d 53, 59 (Ala.Civ.App. 2005).

Commercial & Consumer Collections Procedures for collection of commercial debts are identical to procedures in most other common law states – no special or unique rules or statutes apply. With respect to practices relating to consumer collections, Alabama Courts find credit card liability by virtue of use of the card alone, coupled

with receipt and non - dispute of billing statements. This principle  finds expression variously in several contexts, as follows:

1. Use of the Card Creates an Implied Contract. Its most direct expression can be found in Jefferson  v. HSBC Bank, Nevada N.A., 2008 WL 2559395 (M.D. Ala. June 23, 2008), where the Court rejected the debtor’s argument that “he is not subject to the provision [of the cardholder a greement] because he did not receive a copy of the Agreement until after he used the credit account . . .” The Court said, “Plaintiff

[Debtor] is wrong. In contracts, as in life, we must look before we leap. This court, like other courts, consistently holds that use of a credit card indicates a user’s assent to be bound by the terms of the cardmember agreement.” (citations omitted).

Similarly, in Taylor v. First North American National Bank, 4 325 F.Supp.2d 1304 (M.D. Ala. 2004), the Court also held that a cardholder’s use of the card signaled her

assent to the terms of the card agreement. 2. No Signature Required


Moreover, Alabama courts have consistently rejected a consumer’s assertions, and implicit arguments, that the absence of a signature on a written contract, Cardmember agreement, or other document nullifies his credit card obligations and permits him to purchase as many items as possible with complete impunity. As stated in Merrill, Lynch, Pierce, Fenner & Smith v. Kilgore

, 751 So.2d 8 (Ala. 1999): This Court has held that the object of a signature on a contract is to show mutuality and assent, and that mutuality and assent can be manifested in ways other than a signature. Unless required by a statute to be in

writing, a contract does not have to be signed to be enforceable , so

long as it is accepted and acted upon. Kilgore, 751 So.2d at 11

(internal citations omitted) (emphasis added). See also, Taylor , 325 F.Supp.2d at 1313 (“Under Alabama law there is no requirement that a contract contain a signature to demonstrate assent; the existence of a contract may be inferred from external and objective manifestations of assent.”) The Alabama Supreme Court

likewise held that no signature was required in connection with a bank account in

SouthTrust Bank v. Williams, 775 So.2d 184 (Ala. 2000)



3. Account Stated . Finally, even if none of the above were true, liability can still attach on the wholly separate and independent cause of action known as “account stated,” which in no way depends on the existence of a card agreement. The Alabama Supreme Court described the elements of account stated as follows in  

Gilbert v. Armstrong Oil Co., Inc., 561 So.2d 1078 (Ala. 1990): An account stated is an agreement between parties who have had previous monetary transactions that the statement of account and the balance struck are correct and a promise, express or implied, that the debtor will pay that amount. Wilhite v. Beasley , 497 So.2d 103, 105 (Ala. 1986). When an account is rendered or presented to the debtor and the

debtor does not object to it within a reasonable time, the failure to object is regarded as an admission that the account is correct, and it becomes an account stated.

Gilbert , 561 So.2d at 1081. The two elements of account stated are thus (1) presentment of the account in a statement to the debtor, and (2) the failure of the debtor to object or dispute the account within a reasonable time. E.g. Mahoney

v. Loma Alta Property Owners Assn, 4 So.3d 1130, 1134 (Ala.Civ.App. 2008) (“An account rendered, and not objected to within a reasonable time becomes an account stated,and failure to object will be regarded as an admission of correctness of the account.”); Ayers v. Cavalry SVP I, LLC , 876 So.2d 474, 478 (Ala.Civ.App. 2003) (in an account stated lawsuit, “’[a]n implied agreement to pay a bill can arise . . .

where there has been a showing that the bill was rendered and the recipient of the bill failed to object within a reasonable time.’”) (citation omitted);

Car Center, Inc. v. Home Indemnity Co. 519 So.2d 1319, 5 1323 (Ala. 1988);

University of South Alabama v. Bracy , 466 so.2d 148, 150 (Ala.Civ.App. 1985).

Any dispute of the statements must be raised shortly after the debtor receives the statement. A dispute raised after the lawsuit is filed is too late.Gilbert, 561 So.2d at 1079. An account is thus deemed rendered when it is presented to the account debtor, and not later. Yarbrough v. Armour & Co. , 15 So.2d 281 (Ala.App.

1943). Most importantly, no card member agreement, written contract, or signature is required to establish consumer liability on an account - stated cause of action. As the Alabama Court of Civil Appeals stated in Karrh v. Crawford - Sturgeon Ins

., Inc. , 468 So.2d 175 (Ala.Civ.App. 1985): “ [T]he production of the original written contract is not necessary in an action on an account stated, as an account stated is

not founded on the original liability.” Karrh, 468 So.2d at 177 (internal citation omitted) (emphasis added). 4.Open Account. In Rose Manor Health Care, Inc. v. Barnhardt Manufacturing Co., Inc. , 608 So.2d 358 (Ala. 1992), the Alabama Supreme Court described the open account cause of action as follows:

“[I]n order to establish an open account there must be an account based

upon running or concurrent dealings, the dealings must not have been

closed, settled or stated, and some term of the contract must remain to

be settled between the parties, or the agreement must contemplate

further transactions between the parties.” Rose Manor , 608 So.2d at 360 (

quoting 1 C.J.S. Account, Action On, § 3 at 606 - 07 (1985). Court Jurisdiction

The Small Claims Court has exclusive jurisdiction over cases in which the amount in controversy, exclusive of interest or costs, does not exceed $3,000.00. There are no jury trials available in Small Claims Court. Also, there is no discovery and very limited motion practice. The Small Claims Court has its own rules, which in some instances differ from the Alabama Rules of Civil Procedure and the Alabama

Rules of Evidence. In general, the rules of procedure and of evidence are relaxed in Small Claims Court. A corporation may appear in small claims court with or without an attorney. The District Court has concurrent jurisdiction with the Circuit Court

for cases involving more than $3,000.00 but not more than $10,000.00, exclusive of interest and costs. The Alabama Rules of Evidence and the Alabama Rules of Civil Procedure apply to District Court actions, although some procedural rules are modified for District Court. No jury trials are available in District Court,

and discovery is limited. Parties may appeal a judgment from Small Claims Court or from District Court to the Circuit Court for a trial de novo. In District Court, a corporation can only appear through an attorney. Circuit Court is the general jurisdiction trial court. It has exclusive jurisdiction over claims involving more

than $10,000.00, and it shares concurrent jurisdiction with the District Court over claims involving more 6 than $3,000.00 but not more than $10,000.00. The

full range of discovery is permitted in Circuit Court and jury trials are available.

Filing Fees & Other Costs Court costs vary greatly by county and change often.

While it is difficult to provide an accurate fee schedule , the following ranges should give the reader a general idea of the fees charged by various courts in Alabama.

For small claims cases involving up to $1,500.00, most filing fees range from $61.00

to $78.00 . For small claims cases involving more than $1,500.00, most filing fees range from $135.00 to $156.00. The District Court filing fees generally range from $256.00 to $302.00. The Circuit Court filing fee for cases in which the amount in controversy does not exceed $50,000.00 usually range from $260.00 to $426.00

. If the case involves more than $50,000.00, then the filing fee can be as low as $358.00 and as high as $526.00. The fees for appealing a case to Circuit Court for a trial de novo range from $258.00 to $426.00. If the appeal includes a jury demand

, there is an additional $100.00 fee. The cost of service of process is not included in the above - quoted fees. The County Sheriff or Constable generally charges between $10.00 and $20.00 for service . If the suit names multiple defendants

, then most counties will charge between $10 and $20 for each additional defendant. There is also an additional fee of $50.00 for the filing of a motion for judgment

, whether it is a motion to dismiss, a motion for summary judgment, or a motion for default judgment. However, no such fee exists in small claims cases. The filing fee for a garnishment or an execution is generally $30.00, which does not include a fee for service of process. Please be advised that this is not intended as legal advice. Changes to laws, statutes, regulations and costs can and do occur. We recommend that you contact an attorney for advice specific to your legal matters and your state.

©The National List of Attorneys, January 2013


The Alabama Department of Revenue enters an assessment when a taxpayer files a tax return without payment, or an audit resulting in a tax liability is not paid.  After the assessment becomes final and the appeal period has expired, the assessment is transferred to the Department’s Collection Services Division.  This division acts as an in-house collection agency for the Alabama Department of Revenue.    When the taxpayer’s assessment reaches the Collection Services Division, the tax liability already has the full force and effect of a court judgment.  This means that the Department may proceed to collect the tax liability in an involuntary manner using several different methods.  Taxpayers are urged to pay a tax liability in full upon receipt of the first letter sent by the Collection Services Division.  This letter, called a “Final Notice Before Seizure”, warns that further collection action will be necessary if full payment is not remitted within ten days.  Personal checks, as well as money orders, Visa, MasterCard, Discover, and American Express are accepted.  In order to pay the tax liability by credit card, complete and return the coupon which is included on the bottom of the notice.

If a final assessment is not paid in full or appealed following entry of the Final Assessment, a lien will be recorded to protect the State’s interest, even if the taxpayer has made payment arrangements.   The lien encumbers property and places competing creditors on notice that the state claims an interest in the property.  The lien is usually recorded in the Office of the Judge of Probate of the county where the taxpayer resides, or owns property.  The taxpayer will be unable to sell or transfer his property until the tax lien has been paid.  Although the Department of Revenue does not give notice of a lien to credit reporting agencies, the lien is a public record.  Consequently, credit reporting agencies may obtain the information from the county courthouse and notate the taxpayer’s credit report accordingly.  Once this occurs, the taxpayer’s ability to obtain credit may be affected for the next seven to ten years.
The Department may garnish a taxpayer’s wages, salaries, bonuses, commissions, and any other type of compensation from an employer.   The employer is required to withhold 25% of the taxpayer’s gross wages.  The wage garnishment remains in effect for subsequent pay periods until the total amount of the garnishment has been withheld and remitted by the employer. 
A garnishment may be issued to a bank, credit union, brokerage firm, etc.  The Department is entitled to receive the full amount of money in an account at the time the garnishment is served, not to exceed the amount of the tax liability.
Garnishments may be issued to any third party holding property owned by the taxpayer.  Examples might include insurance proceeds or rental income. 
Writs of execution may be issued to the sheriff where the taxpayer has real or personal property.  In the case of real property, the Department will ask the sheriff to offer the taxpayer’s right, title, and interest in and to the property to the highest bidder.  The property is sold on the courthouse steps subject to any prior encumbrances.  The taxpayer will have one year to redeem the property from the Department or the highest bidder by paying the costs of the sale, the total tax liability, and the accrued interest.  Whenever personal property is sold, there is no redemption period.
The Department may place a debt in the Treasury Offset Program.  In this program the taxpayer’s federal income tax refund may be forwarded to the Department to satisfy all or part of the debt due the state. 
Sections  40-29-72 and 40-29-73, Code of Alabama 1975 provide that responsible persons who collect or withhold trust fund taxes may be personally assessed with the business tax liability if they willfully fail to remit certain taxes to the Department. 
The Department may petition the ABC Board to revoke a liquor license if the business is seriously delinquent in filing or paying business taxes.  Businesses, such as restaurants, lounges, and package stores will be unable to sell alcohol products until the liquor license is restored.
The Department may seize a state tax refund to reduce a tax liability. The Department may use any other collection method allowed by law as needed to collect the tax liability.  
Ex-spouses remain individually liable on a final assessment entered on a joint tax return, even if the parties have mutually agreed that only one of the parties will be responsible for payment.  Such decisions are not binding on the Alabama Department of Revenue.
Advise the Collection Services Division if you are currently in bankruptcy as soon as the “Final Notice Before Seizure” is received.  Information needed includes the case number, date the petition was filed, the court where the case was filed, and the type (chapter) of case.  If the liability is for a tax period due prior to the filing, the Department may be barred from making attempts to collect during the bankruptcy.   Unless the tax is discharged, collection action will resume when the case is closed.  It is advisable to discuss the tax liability with your bankruptcy attorney, since many tax liabilities survive the bankruptcy filing and will be collectible after the case is closed.
Follow the instructions at the bottom of the most recent billing letter you receive from the Collection Services Division.  If you have any questions, contact a Revenue Compliance Officer by calling (334)242-1220.  Checks or money orders should be made payable to the Alabama Department of Revenue.  Always write your assessment number and account number on the check.  When using a social security number, mask the number using the following format: XXX-XX-1234.

*Mail your payment to the following address: Alabama Department of Revenue Collection Services Division P. O. Box 327820 Montgomery, AL  36132-7820

Debt Collection

Debt Management Services (DMS)

As part of the U.S. Department of the Treasury's Bureau of the Fiscal Service, DMS works with federal government agencies to provide a comprehensive debt management program. We also provide debt collection services to the states.

Quick Links

With their office in Birmingham, Alabama, the lawyers at Watts & Herring LLC. represent consumers who are victims of creditor harassment and unfair debt collection practices.

Creditor Harassment and the Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act (FDCPA) requires that debt collectors treat you fairly and prohibits certain methods of debt collection. The FDCPA does not cover the original creditor (for example, the credit card company to whom you owe). The FDCPA covers anyone who regularly collects debts on behalf their clients, including collection agencies and some attorney law firms. It also covers debt buyers who have purchased your debt from the original creditor.

This Website is designed to assist you in understanding your rights, including some of the things a collection agency cannot do while attempting to collect a debt.

What a Collection Agency Cannot Do:

Creditor Harassment – a collection agency may not harass you. That does not mean they cannot call you and request payment, however, it does mean there are certain times of the day to call you, and they cannot repeatedly call you for the purpose of harassing you. You also have the right to stop collection calls by writing to the collection agency and informing them that you do not want to be called. This will not eliminate the debt, but it should eliminate the phone calls.

False Statements – a collection agency may not use false or misleading statements to collect a debt, including falsely implying that you committed a crime or may go to jail, falsely imply they are an attorney or government agency, or misrepresent the amount of your debt.

Threaten You – a collection agency cannot threaten you with violence or harm, or use profanity. Nor can it threaten a lawsuit against you or to seize, garnish, attach, or sell your property or wages, unless the collection agency or creditor intends to do so, and the action is legal. If you have been sued, please click on: I’ve Been Sued – What Should I Do?

Improper Disclosure – a collection agency cannot disclose your debt or imply you owe a debt to family members or co-workers. In fact, they are only allowed to contact family, neighbors, or coworkers to obtain location information about you. They routinely violate the law when they contact third parties. For more information about these issues, please click: Can a Collection Agency Call My Neighbors? or: Can a Collection Agency Call My Office or Coworkers?

In addition, collection agencies cannot contact you once they have been informed you retained a lawyer. We are here to protect your rights. If you are improperly harassed by a collection agency, or if a collection agency has violated the Fair Debt Collection Practices Act, you may be entitled to actual damages, $1000.00, attorney’s fees, and court costs. We invite you to schedule a free confidential consultation by calling us at 205-879-2447 or filling out our intake form on our Contact Us page to discuss your claim or creditor harassment issue. We have helped hundreds of consumers just like you; and we want to help you, too.

Common issues in Fair Debt Collection Practice Act

Can a collection Agency call my Neighbors

Can a collection Agency call My Office or Co-workers

Debt Collection Before and After Bankruptcy

I’ve been sued- What should I do?

Please also feel free to go to our blog, Alabama Consumer Law Blog, where we have posts specifically on debt collectors.  In particular, you may want to read the post on what to do when first contacted by a debt collector – please click here to read it.
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You can also support us by purchasing one of the offers listed below, this way you can get something for youself and at the same time make a donation. We appriciate any help no matter how small. We can also mention your name or buisness name on our donation page, we would really like to have some reputible credit counsellor's and trustee's listed as well as any other person or buisness that would like to donate. If you don't want to be listed that is fine too.


Debt collectors Information, debt collector is a term for a licensed bill collector and debtor is term for person in debt which is secured or unsecured debt

get out of debt, how can you be debt free

credit card debt and all other unsecured debt


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