ALABAMA BANKRUPTCY LAW

Alabama Bankruptcy: Attorneys, Statistics, Exemptions and Courts.

Alabama Bankruptcy Statistics: In 2009, 34,999 bankruptcies were filed in the state of Alabama. The total number of business bankruptcies filed was 819. The total number of personal bankruptcies filed was 34,180. Thus, personal bankruptcies accounted for the majority of the total filings, or 97.66%.

Alabama State Bankruptcy Exemptions

Homestead

The home (“homestead”) exemption is limited to $5,000 for property that is 160 acres or less. Alabama defines “homestead” to include real property and mobile homes. The debtor must record a homestead declaration before selling the property to obtain the homestead exemption.

Personal Property

In Alabama, the following items or expenses are exempt in their entirety:

1. Family pictures
2. Seat or pew in a place of worship
3. Clothing
4. Books
5. Place of burial

Insurance

The following insurance types are exempt or partially exempt when filing for bankruptcy in Alabama:

1. Disability insurance proceeds limited to $250 a month
2. Life insurance policy avails
3. Life insurance proceeds, when the policy contains a valid clause prohibiting the use of proceeds to pay creditors of the beneficiary
4. Annuity proceeds up to $250 per month
5. Benefits from a mutual aid association
6. Benefits from a fraternal society

Pensions

The following individuals and their survivors’ pensions are exempt federwhen filing for bankruptcy in Alabama:

1. Teachers
2. State employees
3. Law enforcement officers
4. Judges

The following types of pensions are exempt or partially exempt when filing for bankruptcy in Alabama:

1. Federal pension exemptions
2. Private retirement benefits (ex: IRA)

Public Benefits

The following public benefits are exempt when filing for bankruptcy in Alabama:

1. Crime victims’ compensation
2. Unemployment compensation
3. Workers’ compensation
4. POWs of Southeast Asia War
5. Aid for disabled, blind or elderly individuals

Tools of the Trade

This is a separate exemption. The following items have been considered tools of the trade in the state of Alabama:

1. For state military personnel: all the equipment they must keep, including arms, uniforms, and equipment

Wages

1. Up to 75% of net earnings per week or 30 times the federal hourly minimum wage, whichever is greater (if the debt is a consumer loan, credit sale, or lease)
2. Maximum 75% of earned but unpaid wages

Miscellaneous: None.

Wildcard

Any personal property, except wages and homestead, up to $3,000 is exempt.

Federal Bankruptcy Exemption: No, debtors are not allowed to take federal exemptions when filing for bankruptcy in Alabama.

Alabama Bankruptcy Courts:

United States Bankruptcy Court, Alabama - Northern District Court

United States Bankruptcy Court, Alabama - Middle District Court

United States Bankruptcy Court, Alabama - Southern District Court