Arizona Bankruptcy Exemptions

Exemptions are critical in bankruptcy because they determine what property you get to keep and not have to turn over to a bankruptcy trustee.  Chapter 7 trustees can only liquidate assets that are not protected by Arizona bankruptcy exemptions.  They are also important in other chapters as the value of non-exempt property generally determines the minimum amount a debtor must pay over a term of years.  In Arizona, debtors must use the Chapter 7 bankruptcy exemptions provided for under Arizona law.  You may also use non-bankruptcy statutes for additional exemptions.  Debtors generally must have lived in Arizona for all of the two years before filing bankruptcy in order to utilize the Arizona bankruptcy exemptions.

ASSET DESCRIPTION AMOUNT
Homestead Interest in real property $150,000
Household Furnishings Household furniture and furnishings, household goods, including consumer electronic devices, and household appliances personally used by the debtor or a dependent of the debtor $6,000
Food/Fuel/Provisions All food, fuel and provisions for up to six months Six Months
Wearing Apparel All wearing apparel used primarily for personal, family or household purposes $500
Musical Instruments All musical instruments for individual or family use $400
Engagement/Wedding Ring All engagement and wedding rings $2,000
Computer/Bicycle/Gun One computer, one bicycle, one burial plot, one firearm $1,000
Vehicle Equity in one vehicle $6,000 ($12,000 if physically disabled)
Prescribed Prostheses Professionally prescribed prostheses, including wheelchair Unlimited
Life Insurance Proceeds Life insurance proceeds not greater than $20,000 if payable to surviving spouse or child upon the life of a deceased spouse, parent or legal guardian $20,000
Minor Child’s Earnings Minor child’s earnings unless the debt to be discharged was contracted for the special benefit of the minor child Unlimited
Child Support/Spousal Maintenance Child support or spousal maintenance received pursuant to a court order Unlimited
Cash Surrender Value of Life Insurance Cash surrender value of life insurance policies where for a continuous unexpired period of two years such policies have been owned by the debtor and have named as beneficiary the debtor’s surviving spouse, child, parent, brother or sister, or any other dependent family member, except for the amount of premium that is avoidable by a creditor as a fraudulent transfer Unlimited
Annuity Contract An annuity contract where for a continuous unexpired period of two years such policies have been owned by the debtor and have named as beneficiary the debtor’s surviving spouse, child, parent, brother or sister, or any other dependent family member, except for the amount of premium that is avoidable by a creditor as a fraudulent transfer Unlimited
Bank Account Bank deposit not to exceed $300 $300
ERISA-Qualified Retirement Plan Benefits from ERISA-qualified retirement plan or deferred compensation plan except those amounts contributed within 120 days before a debtor files for bankruptcy Unlimited
Prepaid Rent/ Security Deposit Prepaid rent, including security deposits for debtor’s residence $2,000
Group Life Insurance Group life insurance policy or proceeds Unlimited
Tools of Trade Tools, equipment, instruments and books (including telephone numbers, client and customer contact information, or marketing tools such as websites, domain names or any other intangible work product in the possession of the debtor or the debtor’s spouse primarily used and necessary to carry on or develop the commercial activity, trade, business or profession of debtor or debtor’s spouse $5,000
Wages 75% of disposable earnings (net earnings) 75%
State Retirement Unlimited
Retirement Benefits Unlimited
Social Security Benefits Unlimited
Veterans’ Benefits Unlimited

This list of Arizona bankruptcy exemptions is non-exclusive and covers most of the commonly used exemptions.  There may be additional Arizona exemptions or federal exemptions available to you.  For a more complete list of exemptions, the Arizona bankruptcy court publishes a list of Arizona exemptions which can be found by clicking here.  In addition, there are many nuances and caveats to the determination of what property is exempt and various cases have interpreted these statutes in ways that may affect your individual situation.  The list above is for informational purposes only and any determination regarding exempt property should be determined only after consulting with qualified bankruptcy counsel.

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