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Each state has a different dollar amount as a threshold for qualifying under the means test. In the State of Alabama: If you are single, live alone, and earn less than $39,768 per year ? you automatically qualify under the means test to file for Chapter 7 bankruptcy protection.

Understandably, almost all attorneys thus want to be paid up front to handle a chapter 7 bankruptcy. An informal survey of chapter 7 attorney's fees a few years ago in the Southern District of Alabama showed that fees generally ranged from $800 to $1,500, with an average of about $1,000.

How Does Bankruptcy Work in Alabama? In most respects, filing for bankruptcy in Alabama isn't different from filing in another state. The bankruptcy process falls under federal law, not Alabama state law, and works by unwinding the contracts between you and your creditors. That's what gives you a fresh start.

If you earn less than the median California income for a household of similar size, then you qualify for Chapter 7 bankruptcy. If you earn more than the median California income, you use the means test to determine whether you qualify to file bankruptcy under Chapter 7.

The personal property exemption will protect property as varied as household goods and furnishings, automobiles, computers, jewelry, lawn mowers and lawn tools, personal tools, bank accounts or proceeds from a lawsuit for personal injury. Presently, the personal property exemption in Alabama is $7,500 per person.

This means if there is more than $15,000 (or $30,000 in a joint filing) of equity in a house, it cannot be kept when filing for bankruptcy. Equity is the value of the house minus the balance due on the mortgage or mortgages on the house. To qualify, the property must be your residence, and it can include a mobile home.