Dothan, Alabama
111 Adris Place
Dothan, AL 36303
(334) 673-0100

What Property Is Exempt in an Alabama Bankruptcy? May 17, 2018

Dothan, Houston
What Property Is Exempt in an Alabama Bankruptcy?, Dothan, Alabama

For borrowers struggling with unsecured debts, chapter 7 bankruptcy can provide a path towards solvency, eliminating many obligations and allowing you to reclaim your life. In exchange, the trustee of the court seizes some of your assets to pay back creditors. However, state and federal law makes a variety of assets exempt, potentially letting you keep a significant portion of property. Below are a few exemptions available to struggling borrowers in Alabama.

Property Exempt From Seizure in Alabama

The Homestead Exemption

If the equity in your primary residence is less than $15,500 (or $31,000 if you’re filing jointly with a spouse), you may be able to keep the property after the bankruptcy. To calculate the equity, subtract the outstanding loan balance from the current market value of your property.

Any Personal Property

chapter 7 bankruptcyThe trustee in a chapter 7 bankruptcy generally won’t seize clothes, but there’s no automatic exemption for furniture or other household possessions. Instead, each person can exempt up to $7,750 in assets of their choosing, including electronics, jewelry, and the equity in their vehicles. Married couples filing together can exempt up to $15,500 in assets.

Retirement Funds

Any tax-exempt retirement account is exempt from bankruptcy under federal law. Borrowers considering a chapter 7 bankruptcy won’t have to worry about losing their pensions, 401(k), IRA, or other retirement savings.

Life Insurance Benefits

The proceeds of life insurance policies are exempt from seizure by the trustee or your creditors, as are the value of most permanent insurance plans. Disability benefits up to $250 per month are also exempt, along with workers’ compensation and other public benefits.

 

If you’re struggling with credit cards, medical expenses, or other debts, the chapter 7 bankruptcy lawyers at The Gil Law Firm will help you get financial relief. Since 2000, they’ve helped borrowers throughout Alabama, Georgia, and Florida navigate the complexities of the system with personalized attention and in-depth legal advice. Visit their website or call (334) 673-0100 to schedule a consultation. Follow their Twitter for more legal tips and insight.

Other Announcements, Events and Deals from The Gil Law Firm
How to Talk to the Claims Adjuster After a Car Accident Injury, Dothan, Alabama
If you were hurt in a car accident that wasn't your fault, you may have grounds for a personal injury claim. Since insurance adjusters are trained to find even the smallest reason&nb...read more
What’s the Difference Between SSI & SSDI?, Dothan, Alabama
For individuals living with a disability, receiving financial benefits through applicable programs can make all the difference in maintaining a good quality of life. The Social Secur...read more
What Does a Bankruptcy Trustee Do?, Dothan, Alabama
Individuals who file Chapter 7 or Chapter 13 bankruptcy are expected to cooperate with their assigned trustees. This person oversees and represents the estate in question, so it...read more
What Mental Impairments Qualify for SSDI Benefits?, Dothan, Alabama
The Social Security Administration awards disability insurance benefits to individuals suffering from mental disorders as well as physical disabilities. In both cases,...read more
How to Build a Strong Slip & Fall Case, Dothan, Alabama
If you were recently involved in a slip-and-fall accident, you might be interested in filing a personal injury claim. The law protects victims in these cases, but before you can...read more