December 8, 2017
Like all states, Alabama has its own set of exemptions that you may use when filing for Chapter 7 or Chapter 13 bankruptcy. Exemptions determine what property (such as a home, car, instrument, retirement account, etc.) you may keep in a Chapter 7 bankruptcy, and how much you must pay to certain creditors in Chapter 13 bankruptcy. Some states allow debtors to choose between the state exemption system and a set of federal bankruptcy exemptions – but Alabama is not one of them. In Alabama, you must use the state exemptions below. In addition to this list, you may also use any applicable amounts in the federal nonbankruptcy exemptions.
Unless noted otherwise, if a couple is married and filing jointly in Alabama, each spouse may claim the full amount of each exemption. This is informally called “doubling.”
To learn more about bankruptcy exemptions, including how they work, which state exemption system you should use, and special rules for the homestead exemption, see Bankruptcy Exemptions – What Can I Keep When I File for Bankruptcy?
Unless otherwise noted, all law references are to the Alabama Code.
6-10-2 - Real property or mobile home, up to $15,500. Property can't exceed 160 acres.
6-10-20 - Before an attempt to sell the home, a homestead declaration must be recorded.
6-10-5 - A burial place and a church pew or seat.
6-10-6 - Clothing, books, family portraits and pictures.
5-19-15; 6-10-7 - For consumer loans, leases, and credit sales: 75% of weekly net income or 30 times the federal minimum hourly wage. For other cases: 75% of earned but unpaid wages. The judge may approve more for low-income debtors.
11 U.S.C. § 522 - Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans).
11 U.S.C. § 522(b)(3)(C)(n) - IRAS and Roth IRAs to $1,283,025.
19-3B-508 - IRAs, Roth IRAs and other retirement accounts.
12-18-10 - Judges (for payments being received only).
16-25-23 - Teachers.
19-3B-501 to 503 - With certain exceptions, spendthrift trusts.
36-21-77 - Law enforcement officers.
36-27-28 - State employees.
15-23-15 - Crime victims' compensation.
25-4-140 - Unemployment compensation.
25-5-86 - Workers' compensation:
31-7-2; 31-7-1 - Southeast Asian War POW's benefits.
38-4-8; 38-5-5 - Aid to blind, aged, and disabled; other public assistance, including earned income tax credit (In re James, 406 F.3d 1340 (11th Cir. 2005)).
Tools of Trade
31-2-78 - Arms, uniforms, and equipment required to be kept by state military personnel.
6-10-8 & 27-14-29 - Life insurance proceeds.
27-14-31 - Disability proceeds up to an average of $250 per month.
27-14-32 - Annuity proceeds up to $250 per month.
27-14-29; 6-10-8 - Life insurance. proceeds and 100% cash value.
27-15-26 - Life insurance, if policy prohibits use to pay creditors.
27-30-25 - Mutual aid association benefits.
27-34-27 - Fraternal benefit society benefits.
6-10-6; 6-10-126 - $7,750 any personalal property (except wages).
Add any applicable Federal Nonbankruptcy Exemptions.
This list includes the majority of bankruptcy exemptions available in Alabama. However, it may not include all exemptions, and states often create exceptions to specific exemptions. In addition, the State Treasurer will adjust the Alabama exemption amounts for inflation periodically. Consider double-checking with your local bankruptcy court.