Debt Collection

Authored By: Legal Services Alabama


What can I do if I don't have enough money to pay all I owe? What can the creditor do if I cannot pay? What if my bill is turned over to a debt collector? Answers to these questions and more are in this document.

What can I do if I don't have enough money to pay all I owe?

  • Pay first for what is most necessary for your family. Food, clothing, shelter and utilities.
  • Mortgage and rent usually come first, along with paying enough to make sure your gas, electricity, and water are not shut off.
  • Next, your car payments for a car you need. This assumes the car is running.
  • After that, if you have enough money, pay loans for furniture or other household goods.
  • If you have money after paying for these things you need, pay on credit card debts, unsecured accounts and medical bills.

Shouldn't I pay someone who threatens to sue me?

  • Do not let harassment or threats from creditors make you pay low priority debts before more important debts.
  • Do not worry about threats to bring suit, take your household goods or garnish your wages unless you have received court papers.
  • You may want to explain to your creditors why you cannot pay debts now and say when you will be able to pay them.
  • If the creditors or collectors are rude, you are not required to talk with them at all.
  • You cannot be put in jail for not paying your debts.

What can the creditor do if I cannot pay?

  • If you have used some of your property as collateral (a secured debt), the creditor can try to take it. See Repossessions.
  • If the collateral is furniture or household goods, the creditor cannot come into your house without your permission.
  • A creditor can take you to court (sue you) to try to get you to pay the debt. If you answer, you get a trial. Court can be complicated, so it is very important that you call a lawyer right away if you get court papers.
  • A creditor cannot try to take your wages or property only after getting a judgment and then waiting at least another 14 days.

What if my bill is turned over to a debt collector?

  • This gives you more legal protection.
  • Unlike creditors, collectors are subject to a federal law called the Fair Debt Collection Practices Act (FDCPA). This law prohibits harassment or deception.
    • Debt collectors can't contact you at unreasonable hours.
    • They can't use obscene language.
    • They can't call repeatedly to annoy you.
    • They can't call you at work if your employer does not want you to receive calls of that sort.
    • They can't lie to you about what they plan to do to you. For example, they cannot threaten to sue you unless they do plan to do so. They can't threaten to immediately garnish your wages unless they have already sued you and gotten a judgment.
  • If you are being bothered by debt collectors, you can make them stop by writing them a letter asking them to stop calling you about the debt. They can still sue you, but they can't keep calling you.
  • If the debt collector violates your rights, you can sue them. You can get any actual damages, plus up to $1,000, plus attorney fees and court costs. Call a private lawyer if you think you may have the right to sue a debt collector.

What else can I do?

  • You can call your creditors to see if they will work out reasonable repayment plans. Be realistic. It does no good to agree to pay amounts you cannot afford.
  • You may want to call a non-profit consumer credit counseling service. They may be able to help you work out a repayment plan.
  • As a last resort, you may want to consider filing a bankruptcy. Filing bankruptcy will quickly stop all debt collection efforts of any kind, at least temporarily. Read our information on Bankruptcy. If you are thinking about bankruptcy, call a lawyer to find out about your rights and responsibilities.
  • Finally, you may not need to pay anything. If you have little property and little or no wages, you may be judgment-proof.
    • No one can take Social Security, SSI, TANF (ADC), VA benefits and Food Stamps.
    • If your Social Security, SSI or VA benefits are directly deposited into a bank account, make sure no other money goes into the account. Make sure your bank knows that all the money is exempt. See Protect Your Social Security and SSI.
    • You can protect up to $7,500 worth of personal property and up to $15,000 of your equity in your home and land. Call a lawyer about whether your possessions can be protected.

Reviewed May 23, 2017 offers legal information, not legal advice. This website provides information on your rights and options. However, the site does not apply the law to your personal facts. For legal advice, you should call a lawyer. To apply for free legal services in Alabama, call the Legal Services Alabama office that is closest to where you live OR call toll-free 1-866-456-4995. You can also apply online HERE.

Last Review and Update: Aug 20, 2008
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