Arizona Bankruptcy Exemptions

What are the Arizona bankruptcy exemptions?  Arizona Bankruptcy Attorneys of AZ Debt Relief Group, PLLC.

In bankruptcy, if your property is exempt it means you can retain the property without turning it over to the bankruptcy trustee.1 This property that you intend to keep should be listed in the appropriate debtor’s bankruptcy schedules.2 When you file for Chapter 7 bankruptcy you have to list all your debts and assets. Your non-exempt property could be exposed to your creditors in the process.3 In Arizona, however, state exemptions could protect the property you own.4

While other states may allow a debtor to use Federal bankruptcy exemptions, Arizona residents need to use state law exemptions only.5 Recently, many Arizona statutes for bankruptcy exemptions have been updated with a higher dollar amount to reflect the reality of changes in the economy.6

A sample of current exemptions in Arizona are listed below. There are, of course, many other exemptions that may be available to you. It is important to note that a husband and wife may double personal property exemptions.7 To evaluate which exemptions would apply to you and your current situation, you should consult an experienced Arizona bankruptcy attorney.

Homestead Exemption Anyone over eighteen who resides in Arizona can obtain this exemption in a house, condominium, cooperative or mobile home where the debtor resides plus the land on which the mobile home is located for no more than $150,000 in value. A.R.S. § 33-1101.
Personal Property: Household Furnishing and Appliances Household furnishings include consumer electronic devices and household devices personally used by the debtor that do not exceed $6,000 in aggregate fair market value. A.R.S. § 33-1123.
Personal Property: Food and Fuel All food, fuel, and provisions from a debtor’s individual or family use for the last six months. A.R.S. § 33-1124.
Personal Property: Engagement and Wedding Rings Engagement and wedding rings not more than an aggregate fair market value of $2,000. A.R.S. § 33-1125.
Personal Property: Wearing Apparel Wearing apparel should not exceed a fair market value of $500. A.R.S. § 33-1125.
Personal Property: Vehicles The equity in one motor vehicle should not be more than $6,000. If the debtor or the debtor’s dependant is physically disabled, the motor vehicle should not have equity more than $12,000.
Money, Benefits, or Proceeds: Life Insurance The money received by or payable to a surviving spouse or child on the life of a deceased spouse, parent, or legal guardian not exceeding $20,000. A.R.S. § 33-1126(A)(1).
Money, Benefits, or Proceeds: Child Support Child support or spousal maintenance received from a court order could qualify as an exemption. A.R.S. § 33-1126(A)(3).
Money, Benefits, or Proceeds: Bank Accounts In a single account at a financial institution, a total of $300 may be exempt. However this property is not exempt from normal service charges assessed by the financial institution account. A.R.S. § 33-1126(A)(9).
Tools and Equipment Tools, equipment, instruments and books including telephone numbers, client or customer information, or marketing tools such as websites, domain names, or other tangible work product that the debtor possesses or used to develop the commercial activity, trade, business, or profession of the debtor or the debtor’s spouse should not exceed the fair market value of $5,000. Tools do not include motor vehicles used for personal, family, or household transportation to and from the debtor’s work place. A.R.S. § 33-1130.
Wages, Salary, and Compensation Disposable earnings mean whatever remains of the debtor’s wages, salary, or compensation for personal services, including bonuses and commissions. Disposable earnings includes payments to a pension, retirement program, or deferred compensation plan after deducting such earnings that the law requires to be withheld. The maximum amount of disposable earnings of a debtor for any workweek subject to process should not be more than 25% of disposable earnings for that week or the amount by which disposable earnings for that week exceeds 30 times the minimum hourly wage prescribed by Federal law. These exemptions do not apply in Chapter 13 bankruptcy filings. A.R.S. § 33-1131.
Public Benefits Unemployment benefits can be exempt as long as they are not commingled with other funds except for necessities during the time the individual was unemployed. No waiver of this exemption is valid. A.R.S. § 23-783.


How Do I Qualify For Exemptions?

Arizona residents can claim certain Arizona exemptions if they live in Arizona for at least two years before filing for bankruptcy.8 If you file for bankruptcy protection and have resided in Arizona for more than two years then you cannot use the federal bankruptcy exemptions in 11 U.S.C. § 522(d). A.R.S. § 33-1133. Whether or not you qualify for a specific exemption depends on your situation.

What If I do not Qualify for Arizona Exemptions?

If you are ineligible to claim Arizona bankruptcy exemptions you may be able file for exemptions under the federal Bankruptcy Code § 522(d).9 You should evaluate this based on which state you lived in for the last two years before filing, or the state where you lived the majority of the 180 day period preceding the last two year period.10 You should consult a skilled Phoenix bankruptcy attorney to see which exemptions you qualify for and so you can confirm their accuracy before you proceed with a bankruptcy petition.

[1] United States Bankruptcy Court District of Arizona: Exemptions In Arizona, 3, (last updated Sept. 2013).

2 Id.

3 John Skiba, Arizona’s Bankruptcy Exemptions Go Up! And Why You Should Care, (Apr. 24, 2013),

4 Id.

5 United States Bankruptcy Court, supra note 1 at 3.

6 Significant Changes to AZ Bankruptcy Laws,, (last visited Feb. 26, 2014).

7 United States Bankruptcy Court, supra  note 1 at 4.

8 Id.

9 Id.

10 Arizona Exemptions, 2, (last visited Feb. 26, 2014).