How can we help you? To discuss what we can do for you, click here for a FREE consultation.
Arizona Bankruptcy Laws
For those filing Chapter 7 bankruptcy, there are laws to protect a certain amount of their essential assets from liquidation. Arizona residents may use state exemptions only.
Arizona’s key exemptions include:
Homestead
$150,000
Personal Property
Up to $4,000 of property including household items, furniture, and family heirlooms; funeral deposits; wrongful death awards; 6 months of food and fuel; up to $5,000 of a motor vehicle; some jewelry; some appliances; burial plot; firearm; Bible (subject to doubling)
Wages
75% of wages earned but not paid or 30 times the federal hourly minimum wage
Pensions
Tax exempt retirement accounts; traditional/Roth IRAs up to $1,095,000/person; police officers; firefighters; board of regent members; state employees; rangers; district employees; ERISA-qualified benefits
Public Benefits
Unemployment; worker’s compensation; welfare
Tools of Trade
Teaching aids; up to $2,500 of tools, equipment, & books; farm machinery and animals up to $2,500; military arms, uniforms, and equipment
Insurance
Fraternal benefits; life insurance proceeds owned more than 2 years; group life insurance proceeds; life insurance proceeds for spouse or child up to $20,000; disability, accident, or health benefits
Miscellaneous
Alimony or child support; minor child’s earnings
It is important to choose the form of bankruptcy that takes full advantage of all the benefits the law allows. Once the debtor and their attorney have created a viable financial plan and the debtor has completed credit counseling, they should follow the steps to bankruptcy:
After filing a bankruptcy petition, they will receive a stay on all collection processes
Follow the plan formed by their bankruptcy trustee to write off or repay all eligible debts
Outline their debt plan with the bankruptcy trustee and their creditors in a required 341 meeting
Discharge (Chapter 7) or pay off (Chapter 13) eligible debts and start fresh
