State of Alabama Bankruptcy Laws
In the United States, the federal government regulates bankruptcy proceedings. Individual states must follow federal guidelines, although they may also create "local rules" -- specific guidelines related to how that court handles certain procedures or issues. If you live in Alabama, check the website for your district court for the local rules before applying for bankruptcy.
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Exemption Amounts
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Alabama does not allow Chapter 7 applicants to use federal exemption limits when claiming an exemption for their houses or cars. Instead, applicants must use state limits. As of 2010, you may claim a homestead exemption if you have less than $5,000 worth of equity in the house. You may claim an exemption for your vehicle if it is worth less than $3,000.
Where to File
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Alabama has three districts: Northern, Middle and Southern. You must file for bankruptcy in the district that serves your city of residence. If you live in Anniston, Birmingham, Decatur or Tuscaloosa, use the Northern district bankruptcy court. If you live in Montogomery and its surrounding areas, use the Middle District court. Otherwise, use the Southern district court.
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Payment Arrangements
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Federal law requires all Chapter 7 bankruptcy applicants to pay a fee of $299 and all Chapter 13 bankruptcy applicants to pay a fee of $274. If you cannot pay this fee all at once, you may apply for permission to pay it in installments. In Alabama, you must pay at least $50 when you file for bankruptcy and cannot divide the payment into more than three installments. You must pay at least $50 each time you pay except for your final payment. If you cannot afford to pay the fee at all, you may apply for a fee waiver only if your income is at 150 percent of the poverty level or less.
Median Income Requirement
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To qualify for Chapter 7 bankruptcy, you must make less than the median income for Alabama. You determine what your income is on the Means Calculation and Monthly Income form when you apply for bankruptcy. As of 2010, the median income for Alabama is $42,586, according to the Census Bureau.
Social Security Number Law
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Alabama law seeks to protect bankruptcy applicants' privacy by not requiring Social Security numbers on the application itself. Instead, you must place only the last four digits of your Social Security number on the application and provide your full Social Security number on a separate form.
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