Posts Tagged ‘bankruptcy exemptions in Alabama’

Alabama Bankruptcy Exemptions

Unless you have lived in the state of Alabama for at least twenty four months prior to the date you filed your petition in a bankruptcy court, the Alabama bankruptcy exemptions will not apply to you. In case you have not resided in a single state for that long a period, you will be able to use the exemptions allowed by the state where you lived the majority of a 6-month period preceding the 24-month period. If that state allows, you may even choose to go for federal set of exemptions instead of the state-specific exemptions. In Alabama, however, you do not have this option. But yes, you can use federal supplemental exemptions in addition to the exemptions allowed by the state.

Homestead

You can keep any mobile home or real property up to a maximum value of $5000. If the property is worth more, the trustee will sell it off and you will be paid $5000 in cash. Area-wise, you are allowed to exempt up to 160 acres of property. The figures can be double if a married couple is jointly filing for bankruptcy. If you sell the property, you may lose your right to get homestead exemptions unless you record a homestead declaration in advance before selling the property.

Wages

If you are still to receive some unpaid wages, the Alabama bankruptcy exemptions allow you to keep up to 75% of that money. The bankruptcy trustee will use the remaining 25% to pay off your debts to your creditors. However, there can be some exceptions. Depending upon your monthly income and other related factors, the court may allow you to keep more than 75%.

Public Benefits

Certain types of public benefits are exemptible in full (100%), such as workers’ compensation, unemployment compensation, benefits to Southeast Asian War POW’s, crime victim’s compensation, and benefits to coal miner’s pneumoconiosis. Besides that, “aid to disabled, aged, and blind” and “aid to families with dependent children (AFDC)” are also allowed to be exempt.

Personal Property

Personal assets and properties that can be exempted in full include family portraits or pictures, clothing needed, Church pew, Burial Plots, and books.

Pensions

Alabama bankruptcy exemptions allow you to keep 100% of different types of pensions that include state employee pensions, law enforcement officer pensions, IRA and other retirement accounts, teacher pensions, judge pensions, and federal pensions. In case of judge pensions, the amount of money that has already been received in past does not get exempted; only those payments that are being currently made or will be made in future come under exemptions.

Insurance

100% exemptions are allowed for certain types of insurance policies, such as benefits from a fraternal society and benefits from a mutual aid association. Life insurance proceeds or avails are also exempt in full if the beneficiary is child or spouse of the insured individual or if there is a specific clause in the policy contract that prohibits the proceeds from being used to pay off the debts that the beneficiary owes to no matter which types of creditors. You may also keep any disability avails or proceeds you are receiving – up to $3000 per year but not more than $250 per month. The same rules apply for annuity avails or proceeds.

Wild Card

In addition to the above Alabama bankruptcy exemptions, you may also exempt up to $3000 of any personal property of your choice that are otherwise not exemptible (but excluding life insurance).


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