Process

• A creditor must take an Alabama debtor to court to obtain a judgment of garnishment. According to Section 6-6-391 of the Alabama Code, the creditor will have to sign an affidavit notifying the court that a garnishment is necessary to collect the debt. The defendant will have the right to appeal her case 30 days after being served notice of the affidavit. According to Section 6-6-394 of the Alabama Code, a debtor who doesn't appear in court will receive notice from an officer of the court or by mail within five days that a garnishment judgment has been ordered. After this period of time, the creditor will receive owed monies withdrawn from the worker's paycheck every pay period.
  
  

Limits

• According to Section 6-10-7 of the Alabama Code, no private or public agencies in the state of Alabama can collectively garnish more than 25 percent of a worker's paycheck. Federal law under the Consumer Credit Protection Act prevents private creditors from garnishing more than 25 percent of a worker's disposable income, defined as money left over after taxes and mandatory retirement plan contributions. Under federal law, the first $217.50 of a worker's paycheck is exempt from garnishment as of March 2011.
  
  

Statute of Limitations

• Per Section 6-2-37 of the Alabama Code, creditors cannot obtain a judgment against a debtor three years after the due date of a bill for open-ended accounts, such as credit cards or unsecured personal loans. If a contract bears a state, county or corporate seal such as in the case of a home loan in default, the creditor must pursue a garnishment within 10 years of the last payment according to Section 6-2-33 of the Alabama Code. Terms on contract loans that do not bear an official seal expire within six years of the last payment date per Section 6-2-34 of the Alabama Code.
  
  

Considerations

• A creditor can receive a garnishment from an Alabama court for the full amount of money owed plus damages, which can include attorney fees, late fees and other penalties outlined by the original lending agreement. In addition, as of March 2011, the state of Alabama allows a maximum 12 percent interest rate on the full amount of principle.