Arizona Bankruptcy Help - Arizona Bankruptcy Exemptions

When an individual files for bankruptcy, all of their possessions, in theory, become property of the estate and should therefore be surrendered. However, each state has a list of property items that can be claimed as "exempt," meaning these items can be kept by the individual filing Chapter 7 bankruptcy (although, if applicable, these items would still be subject to any liens). A major purpose of the exemption laws is to help individuals retain their financial footing. Therefore, exemptions are made for personal effects, household items, work tools, and other daily essentials.

There is much debate about what property should be considered exempt and for how great of a value. Exemption laws vary greatly from state to state. In Arizona, some of the exemptions seem generous; for example, the homestead exemption allows for individuals to keep $150,000 of equity in a house. However, other exemptions seem rather low: only $5,000 is permitted for an automobile and $150 within a checking/savings account. Please refer to the following table, which summarizes the Arizona bankruptcy exemptions.

PROPERTY

AMOUNT EXEMPT

Homestead

Equity in a house, townhouse, condominium, or mobile home, where the debtor resides

$150,000

Bank Account

Money held in one account at any one financial institution

$150

Automobile

One motor vehicle

$5,000

Household items

One kitchen table and one dining room table, with four chairs each
One living room couch
One living room chair
Three living room coffee or end tables
Three living room lamps
One living room carpet or rug
Two beds
One night-stand, dresser, and lamp for each exempt bed
Bedding for each exempt bed
One television set or radio or stereo
One radio alarm clock
One stove
One refrigerator
One washing machine
One clothes dryer
One vacuum cleaner

$4,000 Total

Pets and Animals

Domestic pets, horses, milk cows, and poultry

$500

Wearing Apparel

Clothing belonging to debtor and family

$500

Rings

All engagement and wedding rings

$1,000

Watch

One watch

$100

Library

All books, manuals, published materials, and personal documents

$250

Musical Instruments

$250

Other Personal Property

One typewriter, one bicycle, one sewing machine, a family Bible, a lot in any burial ground, one shotgun or rifle or pistol

$500

Tools of Trade

The tools, equipment, instruments, and books needed for commercial activity, trade, business, or profession

$2,500

Farming Implements

Farm machinery, utensils, implements of husbandry, feed, seed, grain, and animals (only if the primary income is derived from farming)

$2,500

In addition to the above exemptions, the state of Arizona also allows an individual to keep 100% of the following:

The exemption lists given above may not be exhaustive. Please refer to the web site of Arizona Legislative Computer Service of the Arizona State Legislature, ALIS Online, to verify the current status of any exemption.