Alabama Bankruptcy Laws

Standard federal filing fees. Alabama has three bankruptcy districts: Northern (Birmingham, Anniston, Decatur), Middle (Montgomery, Opelika, Dothan), and Southern (Mobile, Selma).

Pre-filing credit counseling and pre-discharge debtor education are required (federal requirements).

The homestead exemption is $18,800 (effective April 2024). Area limit: 160 acres. Married couples each claim separately; a jointly owned homestead can be doubled to $37,600. Next adjustment: July 1, 2026 (adjusted every 3 years for inflation).

$9,400 in personal property — you select which property to protect. Many debtors use this for a vehicle (Alabama has no specific motor vehicle exemption). Additional automatic exemptions: necessary wearing apparel, family portraits/pictures, and all books used in the family.

Tax-qualified retirement accounts (IRAs, 401(k)s, pensions), public employee retirement, and teachers' retirement benefits are fully exempt.

75% of weekly net earnings or 30 times the federal minimum hourly wage — whichever protects more wages. Mirrors federal garnishment limits.

Alabama has opted out of federal bankruptcy exemptions. Debtors must use Alabama state exemptions only.