Alabama law
Bankruptcy Laws in Alabama.
Alabama offers modest bankruptcy exemptions. The homestead exemption is $18,800 (adjusted April 2024, next adjustment July 2026). Personal property exemption is $9,400 applied as a flexible wildcard to any personal property. Alabama has opted out of federal exemptions. Retirement accounts are fully exempt. Alabama has three federal bankruptcy districts (Northern, Middle, Southern).
Last verified: 2026-02-25
State law
Filing Requirements
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).
State law
Key Alabama Statutes
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.
State law
Official Sources
Not Legal Advice
This page summarizes publicly available statutes and rules for informational purposes only. It does not constitute legal advice, and no attorney-client relationship is created by viewing this content. Laws change — always verify with the primary source or consult a licensed attorney in Alabama.
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