How Alabama’s Bankruptcy Exemptions Can Protect Your Assets
Residents of Southwest Alabama who feel buried in bills often worry that filing for relief will cost them the very items they need to rebuild—homes, cars, paychecks, or retirement. Good news: Alabama statutes were written to let everyday families keep critical property while clearing unmanageable debt. The Loris Law Firm has relied on these exemptions for more than 30 years to guide clients through Chapter 7 and Chapter 13 with their dignity—and their belongings—intact. If you need clear answers fast, call our knowledgeable bankruptcy attorney in Mobile, AL at (251) 432‑3100.
Alabama’s Bankruptcy Exemptions Can Keep Your Home Secure
State law grants a homestead exemption of $18,800 in home equity, doubled to $37,600 for a married couple who co‑own the residence. Ala. Code § 6‑10‑2 adjusts the figure every three years to match inflation, so your protection grows over time.
The exemption applies to up to 160 acres, meaning most urban and rural homes qualify. Use it in Chapter 7 to block a forced sale when equity falls under the limit, or combine it with a repayment plan in Chapter 13 to catch up on mortgage arrears without losing the house.
Alabama’s Bankruptcy Exemptions Can Protect Everyday Property
A flexible wildcard exemption lets you shield $9,400 of any personal property—furniture, electronics, savings, or even additional home equity ( Ala. Code § 6‑10‑6). Couples filing jointly can double the amount, giving them up to $18,800 in extra coverage.
The wildcard fills gaps because Alabama offers no separate motor‑vehicle exemption and only limited protection for household goods. By tagging high‑value items first, a filer can walk out of court with the same living‑room set, tools, and family jewelry they had before filing.
Alabama’s Bankruptcy Exemptions Can Keep You on the Road and at Work
Reliable transportation and wages are lifelines after a financial reset. While Alabama lacks a standalone car exemption, applying the wildcard often covers a modest vehicle. When equity is still too high, Chapter 13 lets you pay the difference over time rather than surrendering the car, a strategy experienced Mobile, AL bankruptcy attorney uses.
For income, Ala. Code § 6‑10‑7 shields 75 percent of net weekly wages or 30 times the federal minimum wage, whichever is more. This rule ensures the paycheck you earn after filing remains largely safe from garnishment while the case proceeds. Steady income plus a protected vehicle means you can keep working, earning, and moving toward stability.
Alabama’s Bankruptcy Exemptions Can Shield Retirement and Benefits
Federal non‑bankruptcy exemptions layer on top of state rules to protect 100 percent of most tax‑qualified retirement accounts, Social Security, and VA benefits (11 U.S.C. § 522(b)(3)(C)). That means your 401(k), IRA, or teacher pension remains untouched whether you choose a liquidation or a repayment plan. The same federal protection covers disability benefits and veterans’ compensation, ensuring vulnerable families do not give up long‑term security in exchange for short‑term relief.
Alabama’s Bankruptcy Exemptions Can Guide Your Choice Between Chapter 7 and 13
Exemption limits operate differently in the two main consumer chapters. In Chapter 7, anything over the statutory cap can be sold by the trustee; in Chapter 13, you can keep non‑exempt property by paying its value to unsecured creditors over three to five years. Families with substantial home equity often choose Chapter 13 to avoid a forced sale, while renters or homeowners with limited equity pick Chapter 7 for a quicker discharge. When debt consolidation in Mobile, AL fails to tame interest and late fees, these chapters offer a stronger, court‑enforced solution.
Start Protecting What Matters
Choosing the right path can feel overwhelming, but the seasoned attorneys at Loris Bankruptcy Law Firm use Alabama’s exemptions every day to preserve homes, cars, wages, and retirement for neighbors across Southwest Alabama—results that ordinary consolidation plans cannot match. For a free, confidential review and a written plan you can act on immediately, contact us today through our secure online form or call (251) 432‑3100; your fresh start begins the moment we answer the phone.