Pigs Are Flying

Every day I have to confront Alabama’s meager homestead exemption (Ala Code Sec. 6-10-2). Homestead exemptions across the country differ per state if the state has opted out of the federal exemptions. Mississippi’s homestead exemption is $75,000 and there are some states where the homestead exemption is unlimited. Alabama, however, has a meager $5,000 exemption to protect your home. This means that is you own your home and get behind on your bills, if the equity in your house exceeds $5,000 you would lose your house if you file a Ch. 7 bankrutpcy petition or would be forced to file a Ch. 13 repayment bankruptcy in order to protect your home from creditors. The more equity you have in your house the more money you have to pay in a repayment plan, regardless of whether you can afford the payment or not. How does that help the consumer? It doesn’t.

Thankfully, now with the help of Alabama Appleseed, a bill has been proposed to the state legislature which would increase the homestead exemption in Alabama to $10,000. I know, not a tremendous increase but it is a start. The sponsor of the bill, Jeff McLaughlin, is at least making an attempt to protect people’s property in the midst of one of the most disastrous economic era ever.

Related Posts Plugin for WordPress, Blogger...