Alabama Bankruptcy Laws and Information
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Alabama Bankruptcy Laws

Alabama Bankruptcy Laws That Keep Creditors' Hands Off Property

In Alabama, bankruptcy can be a real solution that provides relief from many types of debt, including mortgage, credit card and medical bills. Alabama offers Chapter 7 and Chapter 13 bankruptcy. Both options may allow you to keep much of your property, including your home.

You can learn more about bankruptcy in Alabama by meeting with a local bankruptcy attorney. A bankruptcy lawyer can provide further details about the state’s bankruptcy laws, and which option might be best for you.

To schedule a consultation with an Alabama bankruptcy attorney near you, simply fill out the form below or call 877-349-1309.

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Alabama Bankruptcy Law

During your first meeting with your Alabama bankruptcy lawyer, he or she will likely explain the difference between Chapter 7 and Chapter 13 bankruptcy.

During this meeting, your lawyer may also ask you some personal questions, or have you fill out an intake sheet to provide specific information about your finances. Your answers should help you and your bankruptcy lawyer determine if filing Chapter 7 or Chapter 13 bankruptcy is right for you.

Chapter 7 bankruptcy is often referred to as “liquidation” because the bankruptcy trustee in your Chapter 7 bankruptcy case may opt to liquidate (sell) any non-exempt property that you own.

In most Chapter 7 bankruptcy cases, the person filing bankruptcy does not own any non-exempt property, so no property is sold. If you do not own a lot of property, Chapter 7 bankruptcy may be an attractive option because many of your unsecured debts could be discharged.

It is important that debtors who are considering Chapter 7 bankruptcy discuss with their Alabama bankruptcy lawyer which and how much of their property may be exempt from liquidation.


  • Real property or a mobile home up to $5,000 in value is exempt. Married couples filing jointly may double the exemption. The Alabama homestead exemption cannot exceed 160 acres.


  • 75 percent of earned but unpaid wages are exempt from liquidation in Alabama. The bankruptcy judge may authorize more for low-income debtors.

Personal Property

  • $3,000 of any personal property.
  • Clothes, family pictures and family books are exempt.

Chapter 13 bankruptcy is often called “reorganization.” Debtors who file Chapter 13 bankruptcy may own more property, and could also be able to keep most of their assets.

In Chapter 13 bankruptcy, the debtor creates and proposes a 3-5 year repayment plan to be approved by the bankruptcy court. This plan allows the debtor time to catch up on past due bills.

Talk to an Alabama Bankruptcy Lawyer Today

People who are considering filing bankruptcy in Alabama may feel overwhelmed by the complexity of the state’s bankruptcy laws.

In order to clear up any confusion about the laws, your Alabama bankruptcy lawyer may be able to explain the bankruptcy process to you in simple terms. By meeting with your bankruptcy lawyer, you may also have the opportunity to get answers to many of your questions about your bankruptcy case.

At Total Bankruptcy we make it easy to find a local Alabama bankruptcy lawyer. Simply fill out the free bankruptcy evaluation form on this page or call us at 877-349-1309, and we’ll connect you with an Alabama bankruptcy lawyer near you immediately.

Note: Keep in mind all laws are complex. If you need legal advice or want to fully understand how these laws affect you, please speak with a local attorney.

Laws may have changed since our last update. For the latest information on your state's bankruptcy laws, speak to a local bankruptcy lawyer.

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