If you’re considering bankruptcy, then it’s important for you to know about exemptions. Exemptions are given for certain assets during a bankruptcy so that you don’t have to give up everything you own just to repay your creditors. Using exemptions cautiously, you may be able to protect the assets that are most important to you from being lost in bankruptcy.
Looking at the bankruptcy laws, you’ll find that they do vary between the states. In Alabama, there are several kinds of property that may be exempted from bankruptcy. Naturally, these are subject to your situation and the specifics of your bankruptcy case.
For most people, the following property may be exempted from bankruptcy:
- Property that is to be used for a burial plot
- Certain kinds of real estate
- Retirement holdings
In Alabama, there is a homestead exemption. It protects $15,000 of equity per individual at their main residence, up to $30,000 per couple. There is also a wildcard exemption, which allows $7,750 of protection for any asset(s) that you choose. Alabama also allows 75% of your wages to be exempt if they were earned before you filed for bankruptcy but paid after filing. Any wages you receive after filing are protected at 100%.
These amounts may change year by year or any time new legislation is passed, so it’s a good idea to talk to your attorney about current exemptions and the kind of bankruptcy that would be right for you. Chapter 7 bankruptcy exemptions are beneficial, but other forms of bankruptcy, like Chapter 13, might be better for you if you want to keep more of what you own.