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What is the Bankruptcy Homestead Exemption ?

Serving Families Throughout Mobile

The bankruptcy homestead exemption in the State of Alabama is a state law which enables a homeowner to protect, or "exempt," a stated amount of equity in a personal residence. As of January 2017, the Alabama homestead exemption is $15,000.00 per person. A Chapter 7 debtor cannot claim a homestead exemption in real estate that is not part of the debtor's personal residence. Also, the debtor cannot claim the Alabama "wildcard" exemption ( currently $7,500.00) on the equity in land or a permanent structure that is the debtor's residence.

A chapter 7 debtor can stack the homestead exemption and the wildcard exemption ( combine the two exemptions ) in some cases where the residence is a camper or mobile home that is not permanently affixed to the debtor's real estate. The are some limitations on claiming the homestead exemption which are beyond the scope of this blog post. You should always disclose all real estate interests to your attorney, including real estate interests that you may obtain through a probate estate, lawsuit or other future event, even if it is only a possibility.

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