Need Help Understanding Alabama Exemptions

[teek76]

My husband is in Chapter 7 BK in Alabama. He has a hearing for the trustee's objection to debtor's claim of exemption on Sept 9th. Our attorney has suggested that at an upcoming meeting (9/7/2010) that we will discuss amending our schedules.
In the meantime, I have read this following statement about exemptions and wonder if anyone can clarify or has any knowledge regarding this....

"you use the ALA Code 6-10-126 for Household Goods, Personal Vehicle, Jewelry, Wearing Apparel etc (basically unlimited exemption) and ALA Code 6-10-6 as the Wild Card, you only want to use the Wild Card for anything that doesn't fit into the exemptions above, like Cash, Checking Accounts, Boat, etc.

???? Help??? Anyone ????
Thanks in advance !!

[ccsjoe]

teek76, I've been following your thread regarding your exemption headaches. Take a stab at this link, read it carefully and see how it applies.

http://www.legalconsumer.com/bankruptcy/bankruptcy-law.php?ST=AL

I hope this helps.

[teek76]

Thanks! Yeah, I've seen the info on this link and it is the hard truth I wish we could avoid. I just can't seem to find any evidence that the info I found regarding 6-10-126 can actually be used in addition to the $3000 basic personal/wild card exemption. If it does.. then great. We're set. But I'm thinking its bogus or someone has their info mixed up because surely if it were accurate and readily available, I would be able to find more information out about it.
My husband's debt is in upwards of $400K ... it's hard to believe they would take your vehicles, household items, tools for his job etc etc that are worth between $6-10 K and sell it to distribute to creditors. How do they do this anyway.. do they divide it amongst ALL creditors equally, or based on the amount of debt or do they give it to the biggest creditors on the list? Just curious. He has a TON of creditors... seems ridiculous to take things so that you can turn around and give each creditor (136 total) app 70 BUCKS each.. I mean, in the grand scheme of things when you owe one creditor $98 THOUSAND dollars.. $70 is a slap in the face. Maybe its the satisfaction of knowing you've debilitated the debtor. I don't know. I hate this.Not to seem selfish. It's his debt and I understand that. But to take his vehicle and tools for work etc that will provide a way to make a living and START NEW just so that someone can get very minimal payment doesn't make any sense to me. Now... if we had an $80K boat sitting somewhere, and a $40K vehicle..then I can see. But it's all just overwhelming at this point. Very sad and heart breaking..even tho it's just 'stuff'. It's emotional...I HATE THISSSSSSSSSSsssssssssssssssssssss

[skweakalee]

From: In Re Morris, describing Sanders v. First State Bank of Franklin County (Matter of Sanders), 30 B.R. 80 (Bankr. N.D. Ala. 1983).

"The Court held that each of the debtors were entitled to the personal property exemption of $ 3,000 in addition to those items specifically set forth in section 6-10-6 (wearing apparel, family portraits or pictures and the family library). Id. at 82. The Court further held that the debtors could apply all or a portion of their $ 3,000 exemption to the vehicle but that section 6-10-126 does not allow the debtor to exempt [*5] essential vehicles or tools regardless of their value; rather, the debtors exemptions were limited by the $ 3,000 personalty clause of section 6-10-6. Id. at 81."

It appears, based on those cases, ccsjoe's link is correct.

And yes, the amount recovered is distributed to all creditors pro rata. For example: there is 15,000 in nonexempt assets. the debtor owes one creditor 300,000 and another 150,000.

300,000:150,000 = 2:1. Creditor 1 recovers 10,000, creditor 2 recovers 5,000 because 10,000:5,000 = 2:1.

Talk to the attorney about valuation. I believe (double check with attorney), your items should be valued at what it would cost to replace the item with a similar item (considering age and condition).

[teek76]

Right on with that information...
the $3000 exemption is all we are allowed... (COME ON Alabama ...gahhhh) .. I think we are getting used to the information and adapting. We should be able to cover our household goods and clothing and money in the bank and security deposits for $3000. The money in the bank was so off. I've been stressing and about to pull my hair out and it turns out, there was only $194 in our account..not $1000. (WHEW!)
If we can fit that all in the exemption and I think we can (furniture and household goods are all at least 10 years old..no new furniture etc)...then that leaves the tools and vehicles to be amended and listed as non exempt.
They will either take those things, abandon them, or hopefully give us the option to buy it back at least. Or at least that is how I am understanding things..
Yesterday this was crushing news. Today.. I am coping. Two hours from now.. the emotional roller coaster may be in full force.. ;)

[SMinGA]

One other thought. He filed, you did not. Did he only list his value of the household items? Or did he list the total? Like if you jointly own $4k worth of furniture, etc. then only $2k is his.