If you are considering filing for Bankruptcy in Arizona, you might want more information about Arizona Bankruptcy Exemptions. Arizona law provides specific bankruptcy exemptions for cars, clothing, guns, and your home. It is important that you speak with an Arizona bankruptcy lawyer before you take any action related to bankruptcy filing. The exemption amounts listed below are subject to change in the future, and you must meet certain requirements before being able to use the Arizona exemptions, even if you live in Arizona.
Married Couples – A.R.S. § 33-1121.01
Married couples filing a joint bankruptcy petition in Arizona are able to double most of the listed exemption amounts for property they can keep when filing for bankruptcy, except for the homestead exemption.
Your Home – A.R.S. § 33-1101(A)
If you own a home, Arizona law protects up to $150,000 in equity in the home when filing for bankruptcy. This is known as the homestead exemption. This can be a house, condo, or mobile home. The person filing for bankruptcy (known as the debtor) must live in the home. There are rules about how long you must have lived in the home. If your home has a fair market value of $200,000, and you owe $160,000 on it, you have $40,000 in equity, which is under the $150,000 exemption for bankruptcy in Arizona. Contact our office for more information.
General Arizona Bankruptcy Exemptions
Determining Value of Property – the values below are either the resale value or the retail value. The value used depends on whether or not there is a lien on the property (11 USC §506(a)(2)). If there is no lien, the value is the resale value (garage sale value for things other than cars or houses). If there is a lien, the value is the retail value (price paid in a store). The rules can be tricky. A Yuma bankruptcy lawyer can help you determine which value applies to your property, maximize which property you can keep, and help you determine whether filing for bankruptcy is right for you.
Cars – A.R.S. § 33-1125(8)
A debtor can keep one car with equity of up to $6,000 when filing for bankruptcy. If the debtor or the debtor’s dependent is disabled, the equity can be up to $12,000. If a debtor has a car with a fair market value of $20,000, and owes $16,000, the equity is $4,000. Equity of $4,000 is under the $6,000 allowed by Arizona law. A Yuma bankruptcy lawyer can help a debtor decide whether or not to keep a car when filing for bankruptcy in Arizona.
Bank Account – A.R.S. § 33-1126(A)(9)
A debtor can keep up to $300 in one bank account when filing for bankruptcy in Arizona. Contact our office and we can work to plan the filing of your bankruptcy to maximize this exemption.
Personal Property – A.R.S. § 33-1123
A debtor can keep up to $6,000 worth of personal property when filing for bankruptcy in Arizona. This includes household furniture, furnishings, household goods, consumer electronic devices, and household appliances. Contact our office to speak with a Yuma bankruptcy lawyer to learn more about how this exemption works to learn what you can keep.
Clothing – A.R.S. § 33-1125(1)
A debtor can keep up to $500 worth of clothing that is used for personal, family or household purposes when filing for chapter 7 bankruptcy in Arizona. The value is based on resale value.
Prepaid Rent and Security Deposits – A.R.S. § 33-1126(C)
A debtor can keep up to $2,000 of prepaid rent and security deposits. This applies to the debtor’s residence, and only if the debtor does not own a home.
Guns – A.R.S. § 33-1125(10)
When filing for bankruptcy in Arizona, A debtor can keep firearms with a total fair market value of up to $2,000. This amount was updated by the Arizona legislature in 2018.
Pets and Domestic Animals – A.R.S. § 33-1125(11)
A debtor can keep all pets when filing for bankruptcy. The Arizona legislature changed this law recently to increase the amount of the exemption to all pets.
Musical Instruments – A.R.S. § 33-1125(2)
A debtor can keep up to $400 worth of musical instruments when filing for bankruptcy in Arizona.
Engagement and Wedding Rings – A.R.S. § 33-1125(4)
A debtor can keep all engagement and wedding rings, with a value of up to $2,000.
Watch – A.R.S. § 33-1125(6)
A debtor can keep one watch, with a value of up to $250. This amount was recently increased by the Arizona legislature.
Library – A.R.S. § 33-1125(5)
A debtor can keep a library with a total value of up to $500 which includes books, manuals, published materials and personal documents.
Computer, typewriter, bicycle, sewing machine, family bible, and burial lot – A.R.S. § 33-1125(7)
A debtor can keep one of each of these items when filing for bankruptcy in Arizona, so long as the total value of all of the items does not exceed $2,000.
Six months of supplies – A.R.S. § 33-1124
All food, fuel and provisions actually provided for the debtor’s individual or family use for six months.
What If I Have Property That Exceeds the Exemption Amounts?
If you have more than the exemption amounts for any of the categories listed above, the bankruptcy trustee may sell the asset to satisfy your creditors. In some cases, the trustee may allow you to buy the property from the bankruptcy estate. Before you take any action selling or transferring property in anticipation of filing for bankruptcy, it is important that you speak to a Yuma bankruptcy lawyer. Certain actions are viewed as fraudulent and could jeopardize your bankruptcy filing.
Understanding what property you have that is protected by law, and the property that is not protected, is critical in determining how a bankruptcy may affect you. Contact the Yuma Lawyers at the Law Office of Jeremy Claridge, PLC at 928-328-1300 to schedule an appointment with one of our Yuma bankruptcy attorneys.