Schedule C: Property Exemptions in Baldwin County
Legal Services in Mobile, Loxley, Gulf Shores & throughout Southern Alabama
At Ryan Legal Services, we frequently have people tell us they want to avoid filing a bankruptcy case because they are afraid they will lose their property. Although this can happen in some situations, the law offers certain protections that allow most people to retain all of their property. The type of bankruptcy, limits for state and federal bankruptcy exemptions, and other factors determine the amount of property that may be retained in a specific situation. For this reason, it is best to get advice from a knowledgeable Mobile bankruptcy attorney about your unique circumstances.
Discover how property exemptions apply to your situation in a free consultation. Call (251) 241-5234 to schedule an appointment.
Protecting Your Property during Bankruptcy
Chapter 13 bankruptcy is often used by people who want to retain all of their property. Under Chapter 13, a payment plan is set up and supervised by the court. While some debt will be discharged, the rest will be paid, which allows you the opportunity to catch up on mortgage payments and car payments to avoid foreclosure and repossession, thus retaining your property.
Property is more likely to be lost in Chapter 7 bankruptcy in which the debtor is essentially agreeing to have property liquidated to pay creditors. This is where exemptions are important, as property that is exempt may be retained. Schedule C is used to list exempt property to prevent liquidation of those assets.
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Property Exemptions in Alabama
There are state and federal exemptions for bankruptcy. Many states use the federal exemptions, but others have separate state exemptions. The legislature has decided that Alabama will operate under state legislation regarding bankruptcy exemptions. This issue can become a bit more complex, if the person just moved to Alabama. Our bankruptcy attorney can advise you about how exemptions apply to you, depending on when you moved to Alabama and which state you moved from.
Current exemptions in Alabama include:
- Homestead – Exemptions include real property or a mobile home, up to $15,000 and no more than 160 acres; a homestead declaration must be recorded prior to selling the property
- Personal Property – A burial place, church pew, clothing, books, and family pictures
- Tools of Trade – Uniforms, arms, and equipment required for state military personnel
- Wages – 75% of weekly net income or 30 times the federal minimum wage for consumer loans, leases, and credits sales. A higher amount may be approved by a judge for low income earners.
- Insurance – Proceeds from life insurance, mutual aid association benefits, fraternal benefit society benefits, and annuity or disability proceeds of up to $250 per month
- Pensions – Tax exempt retirement accounts, IRAs, Roth IRAs, pensions for judges, teachers, law enforcement officers, and state employees
- Public Benefits – Workers’ compensation, unemployment compensation, crime victims’ compensation, South Asian war POW benefits, and other public assistance, including earned income tax credit
- Wildcard – This covers $7,500 of personal property, other than wages.
In some federal statues, federal law applies, such as Social Security, non-public pensions, military benefits, and IRA assets. Because each situation is unique, you may want to consult with a Mobile bankruptcy lawyer to learn how exemptions apply to your case.
For more information or to schedule a consultation, call our law firm today at (251) 241-5234. Saturday appointments are available in Loxley or Mobile.