Sued by Midland Credit Management in Alabama? Here's What to Do Next

2015 · consent order

$42M in consumer refunds + $10M civil penalty; ceased collection on $125M in debt

CFPB found that Encore, Midland Funding, and Midland Credit Management violated the FDCPA, CFPA, and Fair Credit Reporting Act by collecting on debts they could not substantiate, filing misleading affidavits in court, and pursuing debts past the statute of limitations.

CFPB source

2020 · lawsuit settled

$15M civil penalty + consumer redress

CFPB sued Encore and its subsidiaries for violating the 2015 consent order — including continuing to collect on time-barred debt without required disclosures. The settlement extended the conduct provisions of the 2015 order for five additional years.

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. Midland Credit Management has been the subject of CFPB findings related to suing on time-barred debts — check your dates carefully and raise the SOL defense in your Answer.

Lack of Standing / Chain of Title

As a debt buyer, Midland Credit Management must prove they actually purchased your specific account. Demand the complete chain of title — the purchase agreement, bill of sale, and assignment documents. In Alabama courts, failing to produce this documentation can result in dismissal.

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 Midland Credit Management'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.

Who is Midland Credit Management?

Midland Credit Management (MCM) is a debt collection company and subsidiary of Encore Capital Group. They purchase defaulted debts from banks and other creditors, then aggressively pursue collection including filing lawsuits.

How do I respond to a Midland Credit Management lawsuit?

You must file a written Answer with the court before your state's response deadline. In your Answer, you should deny the allegations you dispute, raise affirmative defenses like statute of limitations or lack of standing, and demand they prove they own the debt.

Can Midland Credit Management garnish my wages?

Only after they obtain a court judgment against you. If you do not respond to the lawsuit, they will get a default judgment. Some states like Texas, Pennsylvania, and North Carolina do not allow wage garnishment for consumer debts.

What if Midland Credit Management is reporting wrong information?

If MCM is reporting inaccurate debt information to credit bureaus, this may violate the FDCPA and the Fair Credit Reporting Act (FCRA). You can dispute the information with the credit bureaus and file complaints with the CFPB.

Is Midland Credit Management the same as Midland Funding?

Midland Funding LLC is the entity that purchases the debts, while Midland Credit Management is the collection arm that contacts consumers. Both are subsidiaries of Encore Capital Group and often appear together in lawsuits.

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.