Arizona State Bankruptcy Laws
What are the Arizona Bankruptcy Exemptions?
Arizona law protects all or a portion of your property from being seized by creditors or the bankruptcy trustee in a Chapter 7 bankruptcy. In a Chapter 13 bankruptcy, you are generally allowed to keep all of your assets and property. Certain exceptions may apply, so it’s wise to consult with an Arizona bankruptcy attorney to find which of your assets will be protected in a bankruptcy filed in Arizona. In general, the major Arizona bankruptcy exemptions include:
|GENERAL ARIZONA EXEMPTIONS|
|Real Estate (the Homestead Exemption)
Up to $150,000 in the equity of your home (which includes a mobile home) can be protected.A provision in the new bankruptcy law caps the homestead exemption at $125,000 if you have not lived in the state for at least 40 months prior to the time you file a bankruptcy petition. In some situations, the cap may be permanent. You should consult with an Arizona bankruptcy attorney for specific information.
Up to $5,000 of equity in one motor vehicle can be protected. (Up to $10,000 if the debtor is physically disabled)
Household furniture, furnishings and appliances valuing up to $4,000 and clothing valuing up to $500 can be protected.
|View the complete list of Arizona bankruptcy exemptions|
Please remember that this page provides general information only, and is not intended to provide legal advice. The information is not a substitute for the advice of a qualified bankruptcy attorney. If you need legal assistance, consult an attorney.
Which state’s exemption laws apply in your bankruptcy?
Generally, the laws of the state in which you lived for the 730 days (2 years) prior to filing a bankruptcy petition will apply in your bankruptcy.
If you have not lived in the same state for the 2 years immediately prior to filing your bankruptcy petition, the laws of the state in which you lived for the majority of the 180-day period preceding the 2-year period will likely apply.
If application of the preceding general rules renders you ineligible for exemptions under any state’s laws, you may be allowed to choose the federal exemptions applicable in your bankruptcy.
Is Arizona a community property state?
Yes, Arizona is a community property state. Because it is a community property state, you are responsible for any debts that your spouse incurred while you were married. You are therefore equally liable for your spouse’s debts even if you did not voluntarily assume liability for them by, for example, cosigning for a loan given to your spouse.
Did your senator vote in favor of the new bankruptcy laws?
Following years of intense lobbying by creditors, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). How did your Senators vote on these largely pro-creditor provisions?
Kyl (R-AZ) — YEA
McCain (R-AZ) — YEA
Arizona Bankruptcy Court Locations:
230 N. First Ave., Suite 101
Phoenix, AZ 85003
3001 N. Main Street
Prescott Valley, AZ
38 South Scott Avenue
Tucson, AZ 85701
325 W 19th Street
Yuma, AZ 85364
Note: You may not have to actually go to one of the above bankruptcy courts. Trustees often conduct your meeting at a local venue.
Although bankruptcy is federal law, the bankruptcy courts in each jurisdiction have local rules that must be followed. A local bankruptcy attorney will be familiar with the specific rules in your area.