Bankruptcy Exemptions in Alabama
What property you can keep in bankruptcy in Alabama: homestead, vehicle, wildcard and retirement exemptions, and whether you can choose the federal exemptions.
Short answer: Alabama has opted out of the federal bankruptcy exemptions. In a bankruptcy case, an individual debtor may exempt only property and income that is exempt under Alabama law and under federal laws other than 11 U.S.C. § 522(d). Ala. Code § 6-10-11
| State or federal exemptions | Alabama has opted out of the federal bankruptcy exemptions. In a bankruptcy case, an individual debtor may exempt only property and income that is exempt under Alabama law and under federal laws other than 11 U.S.C. § 522(d). Source: Ala. Code § 6-10-11 |
|---|---|
| Homestead exemption | $18,800 for exemptions effective April 1, 2024 (the court's table shows the amount rising from $5,000 before June 11, 2015, to $15,000, $15,500 (4/1/18), $16,450 (4/1/21) and $18,800 (4/1/24)). The court table gives no acreage limit or statute citation. |
| Wildcard exemption | The court's Alabama exemption table lists a general "Personal property" exemption of $9,400 (effective April 1, 2024; previously $8,225 from 4/1/21). The statute (Ala. Code § 6-10-6) sets the personal property exemption at $7,500, selected by the debtor, excluding wages; the court's table lists the inflation-adjusted amount. Statute: https://alison.legislature.state.al.us/code-of-alabama?section=6-10-6 |
| Retirement accounts | Benefits under a plan, account or arrangement that is or includes a qualified trust under the Internal Revenue Code (including qualified pension, profit-sharing and stock bonus plans, and individual retirement accounts and annuities) are exempt from bankruptcy under 11 U.S.C. § 522(b). The exemption does not apply to taxes, qualified domestic relations orders, contributions above the tax-code limits (and their earnings), or criminal restitution orders. Source: Ala. Code § 19-3B-508(a)-(c) |
| Wages | Alabama exempts 75 percent of a resident employee's wages, salaries or other compensation from garnishment for debts or tort judgments; wages are not covered by the general personal property exemption. Source: Ala. Code §§ 6-10-6, 6-10-7(a) |
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FAQ
Can you use the federal bankruptcy exemptions in Alabama?
Alabama has opted out of the federal bankruptcy exemptions. In a bankruptcy case, an individual debtor may exempt only property and income that is exempt under Alabama law and under federal laws other than 11 U.S.C. § 522(d).
How much home equity is protected in bankruptcy in Alabama?
$18,800 for exemptions effective April 1, 2024 (the court's table shows the amount rising from $5,000 before June 11, 2015, to $15,000, $15,500 (4/1/18), $16,450 (4/1/21) and $18,800 (4/1/24)).
Does Alabama have a wildcard exemption?
The court's Alabama exemption table lists a general "Personal property" exemption of $9,400 (effective April 1, 2024; previously $8,225 from 4/1/21).
Are retirement accounts protected in bankruptcy in Alabama?
Benefits under a plan, account or arrangement that is or includes a qualified trust under the Internal Revenue Code (including qualified pension, profit-sharing and stock bonus plans, and individual retirement accounts and annuities) are exempt from bankruptcy under 11 U.S.C. § 522(b). The exemption does not apply to taxes, qualified domestic relations orders, contributions above the tax-code limits (and their earnings), or criminal restitution orders.
Are wages protected in bankruptcy in Alabama?
Alabama exempts 75 percent of a resident employee's wages, salaries or other compensation from garnishment for debts or tort judgments; wages are not covered by the general personal property exemption.
General legal information, not legal advice. Laws change and local rules can differ; check the linked official source or talk to a lawyer about your situation.