Alabama Bankruptcy Laws
Effect of New Bankruptcy Laws on Alabama Bankruptcies
The new bankruptcy laws were designed to weed out "frivolous" petitions". Initially, that seemed to be the case, as filings dropped to slightly over 100,000 in the first quarter of 2006, as opposed to over 600,000 in the last quarter of 2005 and a year-round total of over 1.6 million.
And, studies are indicating that almost all bankruptcies are not frivolous, but rather are due to circumstances beyond people's control. A February 2006 study by the National Association of Consumer Bankruptcy Attorneys (NACBA) challenged the assertion that the majority of filers for bankruptcy were "deadbeats."
House Judiciary Committee chairman F. James Sensenbrenner (R-WI), a staunch supporter of the new laws, infamously refused to hold hearings in order to waive portions of the new bankruptcy laws to provide relief for Katrina victims, which added to the problems these disaster victims already had.
Alabama Bankruptcy Exemptions
Exempt property is property that you are allowed to keep in a chapter 7 bankruptcies. State law determines what property is exempt. According to Lawyers.com, in Alabama , you may take only the following state exemptions. You may not take the exemptions provided by federal bankruptcy laws even though the federal exemptions may be more beneficial.
- Real property or mobile home, up to $5,000 and not exceeding 160 acres
- Annuity proceeds, up to $250 per month
- Disability proceeds, up to $250 per month
- Life insurance proceeds if beneficiary is insured's spouse or child
- Life insurance proceeds if clause prohibits proceeds from being used to pay beneficiary's creditors
- Certain pensions
- Books, burial plots, church pew, necessary clothing and family portraits or pictures
- Certain public benefits
- Arms, uniforms, equipment that state military personnel are required to keep
- 75% of earned but unpaid wages
- $3,000 of any personal property, except life insurance
NOTE: These are the major bankruptcy exemptions. Check with your bankruptcy lawyer for a full exemptions list.
New Bankruptcy Law Changes - Outlines major changes you should know about in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), also known as the new bankruptcy laws.
This is important! The new bankruptcy law requires all debtors to fulfill two education requirements: a credit counseling course prior to filing and a financial management course before obtaining a discharge. Failure to complete either of these courses and file the appropriate certificates with the court will prevent a successful bankruptcy. The Chapter 13 Trustee will offer the required courses to Chapter 13 debtors, but Chapter 7 debtors are required to take the courses on their own.
Find a U.S. Trustee Approved Pre-Bankruptcy Counseling Provider and Post-Filing Debtor Education Provider. |
