Alabama State Bankruptcy Laws

What are the Alabama Bankruptcy Exemptions?

AlabamaAlabama law protects all or a portion of your property from being seized by creditors or the bankruptcy trustee in a Chapter 7 bankruptcy. In a Chapter 13 bankruptcy, you are generally allowed to keep all of your assets and property. Certain exceptions may apply, so it’s wise to consult with an Alabama bankruptcy attorney to find which of your assets will be protected in a bankruptcy filed in Alabama. In general, the major Alabama bankruptcy exemptions include:

Real Estate (the Homestead Exemption)
Up to $5,000 in the equity of your home can be protected (a mobile home or similar dwelling constitutes a homestead if it is your principal residence).
There is no specific automobile exemption in Alabama.
Other Property
Personal property valuing up to $3,000 can be exempted.
View the complete list of Alabama bankruptcy exemptions.

Alabama FlagWhich state’s exemption laws apply in your bankruptcy?

Generally, the laws of the state in which you lived for the 730 days (2 years) prior to filing a bankruptcy petition will apply in your bankruptcy.

If you have not lived in the same state for the 2 years immediately prior to filing your bankruptcy petition, the laws of the state in which you lived for the majority of the 180-day period preceding the 2-year period will likely apply.

If application of the preceding general rules renders you ineligible for exemptions under any state’s laws, you may be allowed to choose the federal exemptions applicable in your bankruptcy.

Is Alabama a community property state?

No, Alabama is not a community property state. Because it is not a community property state, you will be responsible for your spouse’s debts only if you voluntarily assumed those debts by, for example, co-signing on a loan given to your spouse. In a non-community property state, one spouse can file for bankruptcy and be eligible to eliminate all of their unsecured debts without the involvement of the other spouse.

How did your senator vote on the new bankruptcy laws?

Following years of intense lobbying by creditors, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). Did your Senators vote for these largely pro-creditor provisions?

Sessions (R-AL) — YEA
Shelby (R-AL) — YEA

Alabama Bankruptcy Court Locations:

Frank M. Johnson United States Courthouse Complex
One Church Street
Montgomery, Alabama 36104
(334) 954-3800

George W. Andrews Federal Building
701 Avenue A
Opelika, Alabama 36801
(334) 954-3800

Federal Building and United States Courthouse
100 W. Troy Street
Dothan, AL 36303
(334) 954-3800

U.S. Bankruptcy Court
Southern District of Alabama

201 St. Louis Street
Mobile, AL 36602
(251) 441-5391

1118 Greensboro Ave.
Room 209
Tuscaloosa, AL 35401
(205) 561-1600

1800 5th Avenue North
Birmingham, AL 35203
(205) 714-4000

103 Federal Courthouse
12th & Noble Streets
Anniston, AL 36201
(256) 741-1500

P.O. Box 2748
Decatur, AL 35602
(256) 584-7900

Note: You may not have to actually go to one of the above bankruptcy courts. Trustees often conduct your meeting at a local venue.

Alabama Bankruptcy Attorney Locations:

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Although bankruptcy is federal law, the bankruptcy courts in each jurisdiction have local rules that must be followed. A local bankruptcy attorney will be familiar with the specific rules in your area.

Natalie Conatser

Author: Natalie Conatser

Natalie is a finance professor who writes all about finance as a blog contributor. She is a board certified accountant and also knows a thing or two about debt and avoiding bankruptcy. Natalie plans on touring the US to speak about personal finance.

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