Alabama Exemption Allowances

With much news about the new bankruptcy laws nationwide, Alabama bankruptcy statistics leapt forward by over 300% during the months leading up to the deadline for filing under old Alabama bankruptcy laws. After the effective date of the new Alabama bankruptcy laws, filings dropped substantially. Nevertheless, under both versions of the law, on the State of Alabama bankruptcy exemptions are allowed with one exception. The residency requirement to claim the Alabama bankruptcy exemption list is now 2 years.

For instance, a resident who lives in Birmingham, Montgomery, Mobile, all within less than two years, but who lived in another state two years before the date the petition is filed, cannot claim Alabama law to exempt property. In this case, only federal exemptions would be permitted, which are generally more favorable.

See also: Alabama Homestead Exemption.