SB427 Alabama 2014 Session

Summary

Primary Sponsor

Cam Ward

Republican

Session

Regular Session 2014

Title

Debtors, homestead exemption and personal property exemption, increased, Secs. 6-10-2, 6-10-6, 6-10-7, 6-10-11, 43-8-110, 43-8-111, 43-8-113, 43-8-115 am'd.

Summary

SB427 would raise Alabama's homestead and personal property exemptions for surviving spouses and individuals, allow use of federal bankruptcy exemptions, add CPI-based automatic adjustments, and curb wage garnishment to protect more of a debtor's income.

What This Bill Does

It increases the homestead exemption to $30,000 and the personal property exemption to $10,000 for surviving spouses and individual debtors, with each spouse able to claim separately if married. It allows debtors to optionally exempt property under federal bankruptcy law in addition to Alabama law. It adds three-year CPI-based adjustments to exemption amounts and requires the State Treasurer to publish these adjustments. It also tightens wage garnishment rules by protecting a larger portion of disposable income and setting specific limits on garnishment of the excess income, while preserving other legal protections.

Who It Affects

• Surviving spouses and individuals: higher exemptions for home (up to $30,000) and personal property (up to $10,000); if married, each spouse may claim separately up to these limits.
• Debtors filing bankruptcy: option to exempt property under federal bankruptcy exemptions in addition to Alabama exemptions.
• All Alabama residents with assets or income subject to exemption: overall increase in allowed exempt amounts and protection for a larger share of income.
• Wage earners facing garnishment: a significant portion of wages is protected; only limited percentages of disposable income in excess of the exempt amount may be garnished.
• State Treasurer and financial administration: new authority and requirement to adjust exemption values every three years based on the Consumer Price Index.

Key Provisions

• Increase homestead exemption to $30,000 and personal property exemption to $10,000 for surviving spouses and for individual debtors; if married, each spouse may claim separately up to the new limits.
• Allow debtors filing bankruptcy to exempt property under federal bankruptcy law in addition to Alabama exemptions.
• Create CPI-based adjustments: on July 1, 2016 and every three years thereafter, adjust exemption amounts based on CPI and publish the new values; adjustments apply to cases filed after the adjustment date.
• Add Section 6-10-12 and 43-8-116 to provide for the CPI-based adjustments and specify rounding to the nearest $25; adjustments apply to cases filed after April 1 following the adjustment date.
• Garnishment protections: wages subject to garnishment are largely exempt (75% of wages exempt; only up to a defined portion of disposable income in excess of the exempt amount may be garnished, with a 10% or 15% cap depending on income).
• Additional wage and account protections: certain protections for wages deposited directly into the debtor's bank account and for in-state garnishment compliance; effective date set as the first day of the third month after passage.

AI-generated summary using openai/gpt-5-nano on Feb 25, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Homestead Exemption