Sued by JPMorgan Chase Bank in Alabama? Here's What to Do Next

2015 · consent order

$216M+ total (at least $50M consumer refunds + $30M CFPB penalty + $30M OCC penalty + $106M state payments) plus permanent ban on collecting 528,000 consumer accounts

Joint CFPB and 47-state action finding Chase sold credit card debts that had already been settled, paid, discharged in bankruptcy, or identified as fraudulent, and used robo-signed sworn statements with inaccurate balances and account information to support more than 528,000 collection lawsuits. Chase was permanently barred from collecting on those 528,000 accounts.

CFPB source

Statute of Limitations Defense

In Alabama, the statute of limitations for credit card debt is 6 years. If your last payment was more than 6 years ago, the debt is time-barred. Verify when your last payment or account activity occurred and raise the SOL defense in your Answer if applicable.

Challenge the Amount

Demand a complete accounting from the original creditor's last statement through the current claimed balance. Any unauthorized fees, post-charge-off interest, or collection costs not in the original agreement should be disputed line by line.

Alabama Wage Garnishment Exemptions

75% of disposable earnings or 30x federal minimum wage, whichever is greater, is exempt.

Alabama Deceptive Trade Practices Act

In addition to the federal FDCPA, Alabama's Alabama Deceptive Trade Practices Act may provide additional protections and remedies against JPMorgan Chase Bank's collection practices.

Alabama Court System

Small claims limit is $6,000. Debt cases filed in district court or circuit court depending on amount. Filing fees in Alabama typically range $50-$300.

Does Chase sue for credit card debt?

Yes. Chase is one of the most litigious credit card issuers and regularly sues for unpaid balances on all Chase card products including Sapphire, Freedom, and co-branded cards.

What if I was never properly served in a Chase lawsuit?

Improper service is a valid defense. If you were not personally served according to your state's rules, you can move to dismiss or vacate any default judgment entered against you.

Can I settle a Chase credit card lawsuit?

Chase sometimes settles, particularly after you file an Answer and show you will actively defend. Settlement amounts vary but can be significantly less than the full balance.

Does Chase sell debt to collectors?

Yes. Chase sells some defaulted accounts to debt buyers like LVNV Funding and Portfolio Recovery Associates. If a debt buyer sues you for a Chase debt, they must prove the chain of ownership.

How long do I have to respond to a debt lawsuit in Alabama?

You have 30 days from service to file your Answer with the court. Missing this deadline results in a default judgment.

What is the statute of limitations on credit card debt in Alabama?

6 years from the date of the last payment or charge.

Can they garnish my wages in Alabama?

Yes. Up to 25% of disposable earnings can be garnished after a judgment is obtained.

What courts handle debt lawsuits in Alabama?

District court handles cases up to $20,000. Circuit court handles larger amounts. Small claims court handles cases up to $6,000.

What happens if I ignore a debt collection lawsuit in Alabama?

If you don't file a written Answer within 30 days of being served, the collector can ask the court for a default judgment under Ala. R. Civ. P. 55. That judgment lets them garnish up to 25% of your disposable wages (Ala. Code § 6-10-7), levy your bank accounts, and place liens on non-homestead property. Default judgments in Alabama are good for 10 years and can be renewed. The better path is to file an Answer that denies the allegations and asserts defenses like statute of limitations under Ala. Code § 6-2-34, lack of standing, and failure to validate the debt under 15 U.S.C. § 1692g. Even a short Answer stops the default and forces the collector to actually prove they own your debt, that the amount is correct, and that the chain of assignment is documented. Many debt-buyer cases collapse at that stage because the plaintiff cannot produce the original signed agreement or a complete account history.

Can a debt collector sue me in Alabama for a debt from another state?

Federal law controls where the suit can be filed. Under 15 U.S.C. § 1692i, the collector must sue in the judicial district where you signed the original contract or where you currently live. If you signed a credit card application in Georgia but now live in Mobile, the collector must sue you in Mobile County, not Georgia. Suing in the wrong venue is a per se FDCPA violation that can give you a counterclaim worth up to $1,000 in statutory damages plus actual damages and attorney's fees under 15 U.S.C. § 1692k. The substantive law that applies to the debt may still be the state of contracting (often listed in a choice-of-law clause), but Alabama's six-year SOL under Ala. Code § 6-2-34 applies to the suit itself as the forum state. If the collector picked a wrong venue, raise it immediately in your Answer or by motion to dismiss or transfer.

How does Alabama treat zombie or time-barred debt?

Alabama's six-year statute of limitations on written contracts and open accounts (Ala. Code § 6-2-34) starts to run from the date of default, typically the date of the last payment. Once the six years run, the debt is time-barred and a collector who sues anyway is asserting a claim they cannot legally enforce, which violates 15 U.S.C. § 1692e(2) and § 1692f(1) of the FDCPA and CFPB Regulation F (12 CFR § 1006.26). Be careful: Alabama allows revival of a time-barred debt by a new written promise to pay under Ala. Code § 6-2-13, but a partial payment alone generally does not restart the clock for a fully time-barred debt. If a collector sues you on an old debt, raise the statute of limitations as an affirmative defense in your Answer and consider filing an FDCPA counterclaim.

What property can I protect from a debt collector in Alabama?

Alabama has fairly limited exemptions compared to many states. Under Ala. Code § 6-10-6, you can claim up to $1,000 in personal property as exempt from execution; the state homestead exemption is $5,000 (or $10,000 for a married couple) on up to 160 acres under Ala. Code § 6-10-2. Wages enjoy the federal floor: under 15 U.S.C. § 1673 and Ala. Code § 6-10-7, only the lesser of 25% of disposable earnings or the amount above 30 times the federal minimum wage can be garnished. Social Security, SSI, VA benefits, and most public assistance are federally protected from garnishment under 42 U.S.C. § 407. To assert exemptions after a judgment, file a claim of exemption with the court. Don't wait for the collector to honor exemptions on their own; bank levies often require an affirmative motion to release exempt funds.

Do I need to send a debt validation letter in Alabama?

Yes, and it is one of the most useful tools you have. Under 15 U.S.C. § 1692g, any third-party debt collector must send you a written validation notice within five days of first contact, telling you the amount, the current creditor, and that you have 30 days to dispute the debt in writing. If you dispute within that 30-day window, the collector must stop collection activity until they mail you verification, including documents showing the original creditor, the amount owed, and proof of assignment if the debt was sold. CFPB Regulation F (12 CFR § 1006.34) requires the validation notice to include itemization, statement dates, and a tear-off dispute form. Even if 30 days have passed, you can still dispute under § 1692g(b) at any time, and a written dispute creates leverage when the collector tries to collect or sue. Send disputes by certified mail with return receipt and keep a copy.