Court Ruling Wage Garnishments

Court Ruling Protects Low-Income Workers From Wage Garnishment in Alabama

Merrida v. Credit Acceptance Corp. Establishes Paycheck-by-Paycheck Protection

By Paul A. Seckel, Attorney at Law
Posted June 7, 2017 — Updated for 2025

In a landmark decision that offers much-needed relief to low-income Alabama workers, the Alabama Court of Civil Appeals has ruled that creditors cannot garnish the wages of individuals earning less than $1,000 per paycheck, provided those wages are used for living expenses.

This decision, handed down on May 12, 2017, in the case of Merrida v. Credit Acceptance Corp., fundamentally reshapes how wage garnishment protections are applied to working families across the state.

Background of the Case

The case arose from two separate lawsuits filed by Credit Acceptance Corp., a car loan lender, against two women from Mobile — Samantha Nettles and Lenita Merrida.

  • Ms. Nettles allegedly owed more than $13,500.

  • Ms. Merrida owed almost $10,500.
    These amounts included missed payments, accrued interest, and court costs related to automobile financing.

Both women were represented by Legal Services Alabama (LSA), with additional support from the Southern Poverty Law Center (SPLC). Their legal teams argued that, because the women each earned less than $1,000 per paycheck, garnishing their wages would make it impossible for them to provide basic necessities for their families — a violation of the Alabama Constitution’s protections for wage earners.

The Legal Issue

Historically, Alabama courts interpreted the $1,000 wage exemption under state law as a one-time exemption, not a recurring protection. In other words, a creditor could potentially garnish wages after a debtor had used their one-time $1,000 exemption, regardless of how much they earned in future paychecks.

The attorneys for Ms. Nettles and Ms. Merrida challenged this long-standing interpretation, arguing that the constitutional intent of the exemption was to protect a worker’s ongoing ability to support their family, not to serve as a single-use safeguard.

The Court’s Decision

The Alabama Court of Civil Appeals agreed, ruling that the $1,000 exemption applies to each paycheck, not as a one-time protection.

The court recognized that garnishing wages from individuals earning less than $1,000 per pay period effectively deprives them of the ability to afford housing, food, and other essential living expenses.

In its decision, the court clarified that:

“The $1,000 exemption shall apply to each individual pay period so that workers earning less than $1,000 per paycheck are shielded from garnishments that would prevent them from providing the necessities for themselves and their families.”

This decision established a paycheck-by-paycheck protection, marking a significant victory for working-class Alabamians who struggle to make ends meet.

What This Means for Alabama Workers

The ruling in Merrida v. Credit Acceptance Corp. provides ongoing wage protection to those earning less than $1,000 per pay period. Specifically, this means:

  • Creditors cannot garnish paychecks under $1,000 if the earnings are used for living expenses.

  • Low-income individuals now have continuing protection, rather than a single exemption limit.

  • The ruling ensures that the Alabama Constitution’s intent — to safeguard workers’ basic means of living — is upheld.

For thousands of wage earners across Alabama, this decision may mean the difference between financial survival and hardship.

What You Should Do If Facing Wage Garnishment

If your wages are being garnished — or you’ve received notice that a creditor intends to do so — it’s crucial to understand your legal rights under Alabama law.

At Guntersville Law, LLC, we can:

  • Review your financial situation and assess whether your wages qualify for exemption under this ruling.

  • File the necessary motions to stop or reduce a wage garnishment.

  • Represent you in negotiations with creditors or in court hearings.

  • Help you explore debt relief, bankruptcy, or repayment plan options if appropriate.

Schedule a $100, 30-Minute Consultation

Protect your income — and your family’s stability. If you’re facing a wage garnishment or financial pressure from creditors, our experienced attorneys can help you understand your rights and options under Alabama law.

📞 Call Guntersville Law, LLC today at 256-571-1529 to schedule a $100, 30-minute confidential consultation.

We proudly serve clients across Guntersville, Albertville, Arab, Boaz, and the surrounding North Alabama communities.

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