Bankruptcy in Alabama
In Alabama you use state exemptions only (exemptions are the property the law lets you keep). Your home (homestead): $18,800 of home value per owner, on up to 160 acres.
You file in one of 3 federal bankruptcy courts:
Checked against official sources: October 25, 2026. · Free letter and checklist ↓
What you can keep in Alabama
Exemptions are the property the law lets you keep. You use the Alabama list. The federal list is not available in Alabama.
Law: Ala. Code 6-10-11
| What | Alabama exemption |
|---|---|
Home (homestead) | $18,800 of home value per owner, on up to 160 acres. $56,400 if you are 62 or older or have a disability (since June 1, 2026). If a home is owned jointly, each owner can claim the exemption separately, so a married couple who both own and live in the home can each claim it. A mobile home used as your main home counts. For the disability amount you need proof, such as a disability determination letter or receipt of disability benefits. In bankruptcy, the amount is the one in effect on the day you file. Law: Ala. Code 6-10-2 (as amended by Act 2026-203); Ala. Code 6-10-1(b); Ala. Code 6-10-12 |
Car or other vehicle | No separate vehicle exemption. You can use the $9,400 personal property exemption for a car. Law: Ala. Code 6-10-6 |
Household goods and clothing | $9,400 per person of any personal property you choose (not wages), plus all necessary clothing for you and your family, family portraits and pictures, and books used by the family. Law: Ala. Code 6-10-6; Ala. Code 6-10-12 |
Wildcard (any property) | The $9,400 personal property exemption works like a wildcard: you pick which personal property it covers. Law: Ala. Code 6-10-6 |
Wages | 75% of wages is protected from garnishment. For consumer credit debts, only the smaller of 25% of weekly disposable earnings or the amount above 30 times the federal minimum wage can be taken. Law: Ala. Code 6-10-7; Ala. Code 5-19-15 |
Retirement accounts | Alabama protects qualified retirement plans and IRAs from creditors, including in bankruptcy. Law: Ala. Code 19-3B-508 |
Public benefits | Unemployment benefits, workers' compensation, and public assistance are exempt. Public assistance does not go to the bankruptcy trustee. Law: Ala. Code 25-4-140; Ala. Code 25-5-86; Ala. Code 38-4-8 |
Other exemptions |
Law: Ala. Code 6-10-8 |
Amounts: Homestead $18,800 and personal property $9,400 apply to exemptions claimed on or after April 1, 2024 (State Treasurer CPI adjustment every 3 years, Ala. Code 6-10-12; tables on the State Treasurer and Southern District of Alabama bankruptcy court sites). The $56,400 senior/disability homestead took effect June 1, 2026. The State Treasurer's July 1, 2026 adjustment raises the standard homestead to $20,475 and personal property to $10,225 for exemptions claimed on or after April 1, 2027.
The means test in Alabama: first step
Official Form 122A-1 compares your household's yearly income with the median income in Alabama. Here are the official medians:
- 1 person$64,321
- 2 people$77,451
- 3 people$92,698
- 4 people$106,740
- Each extra person+$11,100
Applies to cases filed on or after April 1, 2026. 1 = one earner; 2, 3, 4 = people in the household; add = amount added for each person over 4
Where to file in Alabama
You file in the federal bankruptcy district where you lived (your domicile) for most of the 180 days before filing. Alabama has three districts (Northern, Middle, Southern), split by county. Check your county on the court pages: Northern https://www.alnb.uscourts.gov/court-info/court-locations, Middle https://www.almb.uscourts.gov/ (division pages), Southern https://www.alsb.uscourts.gov/counties-southern-district.
Law: 28 U.S.C. 1408
Divisions: Birmingham (Southern Division), Tuscaloosa (Western), Anniston (Eastern), Huntsville (Northern)
Clerk's phone: (205) 714-4000 (Birmingham)
Divisions: Montgomery (Northern Division), Dothan (Southern), Opelika (Eastern)
Clerk's phone: (334) 954-3800
Divisions: Mobile (clerk's office); Selma (hearings only)
Clerk's phone: (251) 441-5391
Free help in Alabama
Free letter and checklist
Letter: tell a creditor you filed bankruptcy
Notice to a creditor or debt collector with your case number, court, filing date and chapter.
Checklist: what to gather before you file
Income, tax returns, debts, property and budget papers the federal forms ask about, with Alabama's courts.
Bankruptcy in Alabama by topic
Exemptions in Alabama
Home, car, household goods, wildcard and more, with the law for each.
The means test in Alabama
The official median income and the first-step check.
Where to file in Alabama
The bankruptcy courts, divisions, fees and the 341 meeting.
Good to know in Alabama
- In Alabama, bankruptcy cases are overseen by a U.S. Bankruptcy Administrator (part of the federal courts), not the U.S. Trustee Program (Southern District of Alabama court site).
- The homestead and personal property amounts are adjusted for inflation every 3 years by the State Treasurer, so the amounts written in the Code ($15,000 and $7,500) are lower than the amounts that actually apply.
Law: Ala. Code 6-10-12
- Since June 1, 2026, homeowners age 62+ or with a disability can protect up to $56,400 in home value. The law did not lower the standard amount: other homeowners keep the inflation-adjusted $18,800.
Law: Act 2026-203, HB96
Source: Southern District of Alabama court notice
Changes in 2024–2026
April 1, 2024: homestead raised to $18,800 and personal property to $9,400 (CPI adjustment). June 1, 2026: new $56,400 homestead for people 62+ or with a disability, and the bankruptcy exemption amount is now fixed as of the filing date. July 1, 2026: the State Treasurer published the next CPI adjustment ($20,475 homestead, $10,225 personal property), which applies to exemptions claimed on or after April 1, 2027.
Law: Act 2026-203
Questions about bankruptcy in Alabama
Can I use the federal bankruptcy exemptions in Alabama?
No. Alabama requires you to use the state exemptions.
What is the homestead exemption in Alabama?
$18,800 of home value per owner, on up to 160 acres. $56,400 if you are 62 or older or have a disability (since June 1, 2026).
How much of a car can I keep in bankruptcy in Alabama?
No separate vehicle exemption. You can use the $9,400 personal property exemption for a car.
Does Alabama have a wildcard exemption?
The $9,400 personal property exemption works like a wildcard: you pick which personal property it covers.
What household goods can I keep in Alabama?
$9,400 per person of any personal property you choose (not wages), plus all necessary clothing for you and your family, family portraits and pictures, and books used by the family.
Are retirement accounts protected in bankruptcy in Alabama?
Alabama protects qualified retirement plans and IRAs from creditors, including in bankruptcy.
Are my wages protected in Alabama?
75% of wages is protected from garnishment. For consumer credit debts, only the smaller of 25% of weekly disposable earnings or the amount above 30 times the federal minimum wage can be taken.
Where do I file bankruptcy in Alabama?
You file in the federal bankruptcy district where you lived (your domicile) for most of the 180 days before filing. Alabama has three districts (Northern, Middle, Southern), split by county. Check your county on the court pages: Northern https://www.alnb.uscourts.gov/court-info/court-locations, Middle https://www.almb.uscourts.gov/ (division pages), Southern https://www.alsb.uscourts.gov/counties-southern-district.
What is the median income for the means test in Alabama?
For cases filed on or after April 1, 2026: 1 person: $64,321; 2 people: $77,451; 3 people: $92,698; 4 people: $106,740; Each extra person: +$11,100.
Where can I get free help with bankruptcy in Alabama?
Legal Services Alabama and Alabama State Bar - Get Legal Help.