Alabama Bankruptcy Exemption Worksheet

ALABAMA BANKRUPTCY EXEMPTION WORKSHEET

TABLE OF CONTENTS

1. Debtor Information and Domicile
2. Federal Opt-Out Acknowledgment
3. Homestead Exemption — Ala. Code § 6-10-2
4. Personal Property Exemption — Ala. Code § 6-10-6
5. Wage Exemption — Ala. Code § 6-10-7
6. Insurance Exemptions — Ala. Code § 6-10-8 and Title 27
7. Retirement, Pension, and ERISA-Qualified Plans
8. Public Benefits and Workers' Compensation
9. Trust Interests, Tools of Trade, and Miscellaneous Exemptions
10. Lien-Avoidance Analysis under 11 U.S.C. § 522(f)
11. Schedule C Crosswalk and Totals
12. Attorney Certification

1. Debtor Information and Domicile

Domicile certification (11 U.S.C. § 522(b)(3)(A)):

☐ Debtor has been domiciled in Alabama for the 730 days immediately preceding the petition date.

☐ Debtor was NOT domiciled in Alabama for 730 days, but was domiciled in Alabama for the greater portion of the 180-day period preceding the 730-day period.

☐ Neither of the above applies. Prior-state exemptions of [______________] govern under § 522(b)(3)(A) hanging paragraph; Alabama exemptions DO NOT apply. Discontinue this worksheet and use the prior-state worksheet.

2. Federal Opt-Out Acknowledgment

Pursuant to Ala. Code § 6-10-11, in cases instituted under Title 11 of the United States Code, the only property exempt from the bankruptcy estate of an Alabama debtor is property exempt under (a) the laws of the State of Alabama and (b) federal laws OTHER THAN 11 U.S.C. § 522(d).

Federal exemptions UNAVAILABLE: 11 U.S.C. § 522(d)(1)–(11) homestead, motor-vehicle, household-goods, jewelry, wildcard, tools-of-trade, life-insurance, professionally-prescribed health-aid, and crime-victim/wrongful-death/personal-injury exemptions of the federal scheme are NOT available.

Federal exemptions STILL AVAILABLE under § 522(b)(3):

☐ ERISA-qualified retirement plans, pensions, and tax-qualified accounts (11 U.S.C. § 522(b)(3)(C); § 522(d)(12)).
☐ Social Security benefits (42 U.S.C. § 407).
☐ Veterans' benefits (38 U.S.C. § 5301).
☐ Federal civil-service retirement (5 U.S.C. § 8346).
☐ Railroad retirement (45 U.S.C. § 231m).
☐ Foreign-service retirement (22 U.S.C. § 4060).
☐ Longshore and harbor workers' compensation (33 U.S.C. § 916).
☐ Other federal non-§ 522(d) exemption: [______________________].

Debtor's counsel certifies: ☐ Debtor has been advised that Alabama has opted out of the federal exemption scheme and that all property must be claimed under Alabama state law or non-(d) federal law.

3. Homestead Exemption — Ala. Code § 6-10-2

3.1 Statutory framework

Ala. Code § 6-10-2 exempts the homestead of every Alabama resident, with improvements and appurtenances, not exceeding 160 acres in area, up to the statutory dollar amount as triennially adjusted. The exemption applies to a single dwelling, mobile home, or condominium occupied as the debtor's principal residence.

3.2 Current dollar limits

3.3 Property description and valuation

3.4 Acreage check

☐ Property is 160 acres or fewer (rural).
☐ Property is within an incorporated city/town and is within municipal lot-size limits permitted by § 6-10-2.
☐ Property exceeds permitted area: prepare for partial allotment / sale-and-division proceeding under Ala. Code §§ 6-10-100 et seq.

3.5 1,215-day analysis (11 U.S.C. § 522(p), (o), (q))

☐ Debtor acquired the homestead more than 1,215 days before the petition. No federal cap applies; full Alabama exemption available.
☐ Debtor acquired the homestead within 1,215 days. Exemption capped at $189,050 (federal); equity transferred from prior Alabama homestead within the period rolls over and does not trigger the cap.
☐ Debtor has converted nonexempt property to homestead within 10 years with intent to hinder, delay, or defraud creditors (§ 522(o)). Exemption reduced by the amount of converted value.
☐ Debtor was convicted of a felony or owes a debt arising from securities fraud, fiduciary fraud, or certain intentional torts (§ 522(q)). Exemption capped at $189,050 unless reasonably necessary for support.

3.6 Spousal joinder and waiver

☐ Title is held individually; no spousal acknowledgment required for the bankruptcy claim itself.
☐ Title is held jointly with spouse; both spouses must claim the homestead (or the non-filing spouse must consent in writing if filing alone).
☐ Pre-petition homestead waiver under Ala. Code § 6-10-122: ☐ none ☐ exists (attach waiver document; analyze validity — must be a separate writing, attested by one witness, with spousal acknowledgment if married).

4. Personal Property Exemption — Ala. Code § 6-10-6

4.1 Statutory framework

Ala. Code § 6-10-6 exempts personal property selected by the resident debtor up to the statutory dollar amount as triennially adjusted, PLUS — without dollar cap and in addition to the aggregate amount — all necessary and proper wearing apparel of the debtor and family, all family portraits or pictures, and all books used in the family. Burial places are separately exempt under Ala. Code § 6-10-5. Wages are EXCLUDED from this exemption per Ala. Code § 6-10-6.1 and are governed by § 6-10-7.

4.2 Current dollar limit

4.3 Itemization of selected personal property

4.4 Items exempt WITHOUT dollar cap (in addition to § 6-10-6 aggregate)

4.5 Wage carve-out

Wages, salaries, and other compensation for personal services CANNOT be claimed under § 6-10-6. They are governed exclusively by § 6-10-7 (Section 5 below). Pre-petition unpaid wages held by an employer on the petition date are property of the estate and must be analyzed under § 6-10-7's 75% formula.

5. Wage Exemption — Ala. Code § 6-10-7

5.1 Statutory framework

Ala. Code § 6-10-7 exempts seventy-five percent (75%) of the wages, salaries, or other compensation of laborers and employees who are residents of Alabama for personal services, from levy under writs of garnishment or other process for the collection of debts contracted or judgments entered in tort. The garnishee retains 25% during the period necessary to satisfy the debt, and after 30 days commences paying the funds into court.

5.2 Federal floor

The federal CCPA (15 U.S.C. § 1673) provides an alternate floor: garnishment is limited to the LESSER of (i) 25% of disposable earnings or (ii) the amount by which weekly disposable earnings exceed 30 times the federal minimum wage. Apply the more protective formula.

5.3 Wage analysis

5.4 Special wage categories

☐ Child support / alimony withholding (CCPA permits up to 50–65%; not subject to § 6-10-7).
☐ Federal tax debt (26 U.S.C. § 6334; separate exempt amount).
☐ Federally guaranteed student loans (limited to 15%).

6. Insurance Exemptions — Ala. Code § 6-10-8 and Title 27

6.1 Life insurance proceeds and avails (Ala. Code § 6-10-8)

Insurance and its proceeds and avails are exempt from liability for the debts, engagements, or torts of the insured when the spouse or other person insures their own life or another's life for the benefit of the spouse and/or children. The exemption protects cash surrender value, loan value, and dividends.

6.2 Disability and annuity benefits

☐ Disability benefits exempt under Ala. Code § 27-14-31 / § 27-15-26 — list: [____________________].
☐ Annuity benefits exempt up to the statutory monthly amount under Ala. Code § 27-14-32.
☐ Fraternal benefit society benefits exempt under Ala. Code § 27-34-27.

6.3 Health and accident insurance proceeds

☐ Health insurance proceeds claimed exempt: $[______________] (cite Ala. Code § 27-14-29 / § 27-14-31 as applicable).

7. Retirement, Pension, and ERISA-Qualified Plans

7.1 ERISA-qualified employer plans (full federal exemption)

Funds in ERISA-qualified plans are not property of the bankruptcy estate under Patterson v. Shumate, 504 U.S. 753 (1992), to the extent of the plan's anti-alienation provision. Listed defensively on Schedule C citing 11 U.S.C. § 541(c)(2) and § 522(b)(3)(C).

7.2 IRAs and Roth IRAs

11 U.S.C. § 522(b)(3)(C) and § 522(n) cap aggregate IRA/Roth IRA exemption at the federal limit (currently $1,711,975 in aggregate; adjusted triennially) regardless of state law. Rollovers from ERISA plans are not subject to this cap.

7.3 State and local government retirement systems

☐ Teachers' Retirement System of Alabama benefits exempt under Ala. Code § 36-27-28.
☐ Employees' Retirement System of Alabama benefits exempt under Ala. Code § 36-27-28.
☐ Judicial Retirement Fund benefits exempt under Ala. Code § 12-18-10.
☐ Peace officers' pension benefits exempt under Ala. Code § 36-21-77.
☐ Firefighters' / police officers' pension benefits — cite local act / § 11-43-7.4 as applicable.

7.4 Federal retirement (non-(d) federal exemption)

☐ Civil-service retirement (5 U.S.C. § 8346).
☐ Foreign-service retirement (22 U.S.C. § 4060).
☐ Military retirement (10 U.S.C. § 1440 / 38 U.S.C. § 5301 for VA disability).
☐ Railroad retirement (45 U.S.C. § 231m).

8. Public Benefits and Workers' Compensation

9. Trust Interests, Tools of Trade, and Miscellaneous Exemptions

9.1 Spendthrift trust beneficial interests

Under Ala. Code § 19-3B-502 / § 19-3B-508, a beneficiary's interest in a properly drafted spendthrift trust is not subject to the claims of the beneficiary's creditors. List each trust:

9.2 Tools of trade

Alabama has no separate tools-of-trade exemption distinct from § 6-10-6. Tools used in the debtor's trade or profession are claimed as part of the § 6-10-6 personal-property aggregate (Section 4.3 above). Where tools materially exceed the cap, consider buy-back from the trustee or Chapter 13 retention.

9.3 Burial / funeral

☐ Burial place exempt under Ala. Code § 6-10-5 (no dollar limit).
☐ Pre-paid funeral contract exempt under Ala. Code § 27-17A-30.

9.4 Education savings

☐ § 529 college savings plan — limited federal exclusion under 11 U.S.C. § 541(b)(5)/(6); contributions within 365 days are property of the estate.
☐ Coverdell ESA — same federal treatment.

9.5 Earned income and child tax credit

Federal earned-income credit and refundable child-tax-credit portions of pre-petition tax refunds — Alabama courts split on exemption status; cite § 6-10-6 aggregate or argue federal preemption under 26 U.S.C. § 32(k) / In re Hatch.

9.6 Personal-injury and wrongful-death recoveries

☐ Pre-petition personal-injury claim — no Alabama exemption analogous to 11 U.S.C. § 522(d)(11); claim § 6-10-6 aggregate to extent available.
☐ Wrongful-death proceeds — exempt as separate fund under Ala. Code § 6-5-410 (proceeds are not subject to debts of decedent or beneficiaries).

9.7 Wildcard

Alabama has NO general wildcard exemption analogous to 11 U.S.C. § 522(d)(5). Unused homestead amount does NOT roll over to personal property. The "wildcard" effect in Alabama is limited to the flexibility of selecting which items to apply the § 6-10-6 aggregate to.

10. Lien-Avoidance Analysis under 11 U.S.C. § 522(f)

A debtor may avoid the fixing of a lien on an interest in property to the extent the lien impairs an exemption. Two categories:

(A) Judicial liens — except liens securing domestic-support obligations.
(B) Nonpossessory, non-purchase-money security interests in: household furnishings, household goods, wearing apparel, appliances, books, animals, crops, musical instruments, and jewelry held primarily for personal/family/household use; implements/professional books/tools of trade; or professionally prescribed health aids.

Formula (§ 522(f)(2)(A)): Lien impairs exemption to the extent that the sum of (i) the lien, (ii) all other liens on the property, and (iii) the exemption the debtor could claim in the absence of any lien EXCEEDS the value of the debtor's interest absent the lien.

11. Schedule C Crosswalk and Totals

11.1 § 522(l) and Rule 4003 deadlines

• ☐ Schedule C filed with petition or within 14 days (Fed. R. Bankr. P. 1007).
• ☐ Trustee/creditor objection deadline: 30 days after the meeting of creditors concludes or any amendment to Schedule C (Fed. R. Bankr. P. 4003(b)(1)).
• ☐ Domestic-support objection: 30 days after notice (Rule 4003(b)(2)).
• ☐ If objection is filed, party objecting bears the burden of proof (Rule 4003(c)).

12. Attorney Certification

I, [ATTORNEY NAME], counsel of record for the above-named debtor(s), certify that:

(a) I have reviewed the debtor's schedules of assets and liabilities;
(b) I have applied Alabama state-law exemptions under Ala. Code §§ 6-10-1 through 6-10-130, plus non-(d) federal exemptions, to the property of the estate;
(c) The debtor has been advised of Alabama's federal opt-out under Ala. Code § 6-10-11 and that 11 U.S.C. § 522(d) is unavailable;
(d) The exemption amounts cited above reflect the triennial-adjustment figures published by the U.S. Bankruptcy Courts for the Northern, Middle, and Southern Districts of Alabama as of the petition date;
(e) The 1,215-day analysis under 11 U.S.C. § 522(p), § 522(o), and § 522(q) has been performed and any applicable cap is reflected in Section 3.5; and
(f) This worksheet is an internal calculation aid and is NOT to be filed with the bankruptcy court.

Date: [__/__/____]

[ATTORNEY SIGNATURE]
[ATTORNEY NAME], Esq.
Alabama Bar No. [____________]
[FIRM NAME]
[FIRM ADDRESS]
[PHONE] · [EMAIL]
Counsel for Debtor(s)

SOURCES AND REFERENCES

• Ala. Code § 6-10-2 — Homestead exemption (amount and area). https://law.justia.com/codes/alabama/title-6/chapter-10/article-1/division-1/section-6-10-2/
• Ala. Code § 6-10-3 — Homestead alienation by married person. https://codes.findlaw.com/al/title-6-civil-practice/al-code-sect-6-10-3/
• Ala. Code § 6-10-6 — Personal property exemption. https://www.lawserver.com/law/state/alabama/al-code/alabama_code_6-10-6
• Ala. Code § 6-10-6.1 — Wages excluded from § 6-10-6. https://www.lawserver.com/law/state/alabama/al-code/alabama_code_6-10-6-1
• Ala. Code § 6-10-7 — Wage exemption (75% disposable). https://codes.findlaw.com/al/title-6-civil-practice/al-code-sect-6-10-7/
• Ala. Code § 6-10-8 — Life insurance proceeds. https://law.justia.com/codes/alabama/title-6/chapter-10/article-1/division-1/section-6-10-8/
• Ala. Code § 6-10-11 — Federal bankruptcy opt-out. https://law.justia.com/codes/alabama/title-6/chapter-10/article-1/division-1/section-6-10-11/
• Ala. Code § 6-10-20 — Declaration of claimed exemptions filed in probate court. https://law.justia.com/codes/alabama/2021/title-6/chapter-10/article-1/division-2/section-6-10-20/
• Ala. Code § 6-10-122 — Waiver of homestead (separate writing, spousal joinder). https://law.justia.com/codes/alabama/title-6/chapter-10/article-3/section-6-10-122/
• U.S. Bankruptcy Court, Southern District of Alabama — Triennial exemption amounts (homestead $18,800 / personal property $9,400 effective 4/1/2024). https://www.alsb.uscourts.gov/alabama-exemption-amounts
• 11 U.S.C. § 522 — Exemptions (federal). https://www.law.cornell.edu/uscode/text/11/522
• Patterson v. Shumate, 504 U.S. 753 (1992) — ERISA-qualified plans not estate property.
• Fed. R. Bankr. P. 4003 — Claim of exemptions; objections.

END OF WORKSHEET