What are bankruptcy exemptions in Alabama?

Alabama has modest exemptions; the absence of a specific vehicle exemption forces strategic wildcard allocation.

1. Opt-Out State — Ala. Code § 6-10-11

Alabama opted out. Debtors must use Alabama exemptions.

2. Homestead — Ala. Code § 6-10-2

$16,450 for individuals (adjusted every 3 years for CPI; effective 2023).

$32,900 for married couples both on title.

Acreage limit: 160 acres.

3. Personal Property Wildcard — Ala. Code § 6-10-6

$8,225 in personal property (effective 2023; adjusted every 3 years).

Not applicable to wages (separate § 6-10-7 protection).

4. Motor Vehicle

No specific vehicle exemption — must use the $8,225 personal property wildcard.

5. Personal Property — Ala. Code § 6-10-6

The $8,225 covers all personal property collectively except specifically excluded items.

Specifically exempt — Ala. Code § 6-10-126: necessary clothing, family pictures, books, family Bible — separately exempt without dollar limit.

6. Tools of Trade

Subsumed within the $8,225 wildcard.

7. Wages — Ala. Code § 6-10-7

75% of disposable earnings OR 30x federal minimum wage exempt (matches CCPA).

8. Retirement Accounts — Ala. Code § 19-3B-508

ERISA plans, IRAs, Roth IRAs: fully exempt under Alabama's adoption of Uniform Trust Code retirement protections.

9. Insurance — Ala. Code § 27-14-29

Life insurance proceeds and cash value — exempt if beneficiary is spouse, child, or dependent.

10. Public Benefits — Ala. Code § 25-4-140 (unemployment), § 25-5-86 (workers' comp), federal Social Security

Fully exempt.

11. Burial Plot — Ala. Code § 6-10-5

Fully exempt.

12. Crime Victim Compensation — Ala. Code § 15-23-15

Fully exempt.

13. Tenancy by the Entirety

Alabama does NOT recognize tenancy by the entirety — limited asset protection for married couples.

14. Domicile Requirement

730-day rule under 11 U.S.C. § 522(b)(3).

15. Strategy

Alabama's modest exemptions force strategic decisions:

Vehicle equity often consumes much of the $8,225 wildcard.

Significant home equity above $16,450 may require Chapter 13.

Married couples may both file to double homestead and wildcards.

16. CPI Adjustment

Adjusted every 3 years under Ala. Code § 6-10-2(b) and § 6-10-6(b).

This is legal information, not legal advice.