December 8, 2017
When it becomes clear that you have more bills than income to cover them, filing bankruptcy can get you back on track. But finding all the information you need to file a bankruptcy case sometimes might feel like a wild goose chase.
This article is a good place to start. You’ll learn where to find official bankruptcy forms, Alabama means testing information, credit counseling providers, and your local bankruptcy court. You’ll also learn about protecting property in your Alabama bankruptcy.
(If you’re not sure which bankruptcy chapter is best for you, start by reading What Is the Difference Between Chapter 7 and Chapter 13 Bankruptcy?)
Official Bankruptcy Forms
As a bankruptcy debtor, you’re required to disclose all aspects of your financial situation before the court will grant your discharge (wipe out) of qualifying debt. You’ll provide details of your income, expenses, property, debt, and property transactions on official bankruptcy forms that you can get from the U.S. Court website at no charge. Then you’ll file your paperwork in your local bankruptcy court along with a filing fee or fee waiver and proof that you’ve completed a credit counseling course (more below).
Alabama Bankruptcy Information
Federal law governs bankruptcy filings; however, some aspects of Alabama law play a part. Here’s what you need to know to prepare your bankruptcy petition.
Means Testing and Credit Counseling Information
To file a bankruptcy case, you’ll need two types of information specific to Alabama that you can find on the U.S. Trustee website: approved credit counseling providers and means testing information.
- Means testing information. Before you qualify for Chapter 7 bankruptcy, your income must pass the “means test.” If your family income is lower than the median for Alabama, you qualify. If your family income is higher than the median, you might still qualify after subtracting certain standard expenses. You can find the income charts and expenses guidelines for the means test on U.S. Trustee’s website (select “Means Testing Information”). To determine your plan payment for a Chapter 13 bankruptcy, you’ll perform a similar calculation.
- Course providers. Most filers need to complete a credit counseling course before filing and a debt management course afterward. To find the list of approved education providers, go to the U.S. Trustee’s website (select “Credit Counseling and Debtor Education” from the left navbar).
Alabama Bankruptcy Court Locations
Alabama has three bankruptcy court districts. You’ll want to start by using the Court Locator to find the district you should file your case in. Choose “Bankruptcy” for court type, and enter your city or zip code.
Each court has a website where you’ll find the court’s local rules and instructions for filing your paperwork. Click on the district name to go to the court’s homepage.
Northern District of Alabama
- Division locations: Anniston, Decatur, Birmingham, and Tuscaloosa
- Finding your division: Select a city in the “Court Locations” box and consult the map.
- Presiding judge: Chief Judge James J. Robinson
Middle District of Alabama
- Division locations: Montgomery, Opelika, and Dothan
- Finding your division: Select a city in the “Court Locations and Hours” box and consult the map.
- Presiding judge: William R. Sawyer
Southern District of Alabama
- Division locations: Mobile and Selma.
- Finding your division: Contact the court clerk.
- Presiding judge: Henry A. Callaway
Alabama Bankruptcy Exemptions
There’s no need to worry that you’ll lose all of your property when you file bankruptcy.
- Exempt property. You’re allowed to keep much of your property—maybe even all of it—depending on whether your property appears on the list of Alabama exemptions.
- Nonexempt property. A Chapter 7 trustee can sell any assets that you can’t exempt and pay the proceeds to your creditors. If you file a Chapter 13 bankruptcy, you won’t turn over any property, but you’ll pay the value of the nonexempt property in your three- to five-year payment plan.
- Doubling exemptions. In Alabama, spouses filing a joint bankruptcy can double the exemption amount if both have an ownership interest in the property.
Here is a list of commonly used Alabama exemptions:
- Homestead. Up to $15,000 in equity and up to 160 acres of real estate and the residence upon it, including a house, mobile home, or similar dwelling place. (Ala. Code 6-10-2)
- Personal Property. Burial plot or church pew for use by you or your family (Ala. Code 6-10-5); clothing, family portraits, pictures, and books for use by you or your family (Ala. Code 6-10-6); life insurance proceeds (Ala. Code 6-10-8).
- Motor vehicle. Alabama doesn’t have a motor vehicle exemption, but you can use the wildcard exemption to protect vehicle equity (see below).
- Retirement accounts and benefits. IRAs, Roth IRAs, and retirement accounts qualified under the Internal Revenue Code (Ala. Code 19-3B-508); State Employees’ Retirement Systems accounts and benefits (Ala. Code 36-27-28); Teachers’ Retirement System accounts and benefits (Ala. Code 16-25-23).
- Public benefits: earned income tax credit. (Ala. Code 38-4-8; 38-5-5; In re James 406 F.3d 1340 (11th Cir. 2005))
- Wages and income: 75% of wages or 30 times the federal minimum wage. (Ala. Code 6-10-7, 5-9-15)
- Tools of the trade. Uniforms and arms of military personnel. (Ala. Code 31-2-78)
- Wildcard. Up to $7,500 of any personal property, except for wages. (Ala. Code 6-10-6; 6-10-126)
Additional exemptions might exist. Also, exemption amounts change periodically. To ensure that you have the latest figures, visit the website for the Alabama State Treasurer.
This overview cannot provide all of the information you’ll need to file a bankruptcy case. For more detailed information, consider buying a self-help book such as How to File Chapter 7 Bankruptcy by Attorney Cara O’Neill and Albin Renauer J.D.