Updated September 29, 2023
Arizona Bankruptcy Exemptions – What Property is Protected from Creditors
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 | $400,000 |
| 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 | $15,000 |
| 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 | $15,000 ($25,000 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 | 90% of disposable earnings (net earnings) | 90% |
| 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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