Arizona Bankruptcy Exemptions in Chapter 7 & Chapter 13 Bankruptcy Filings

Expert Arizona Bankruptcy Attorneys Take a Look at The Exemptions When Filing For Bankruptcy

Our Arizona Bankruptcy Lawyers take a look at the exemptions that will be applicable if you are going to file for bankruptcy in Arizona. Bankruptcy exemptions play a large part in both Chapter 7 and Chapter 13 bankruptcy filings in AZ. Bankruptcy exemptions are used to keep property in a bankruptcy filing. Property that you are able to keep by using bankruptcy exemptions is called “exempt property”.

Many people mistakenly believe that if you declare bankruptcy, you have to surrender all of your property. While you may have to surrender certain properties to your bankruptcy trustee, you won’t have to give up anything at all with proper planning. If you qualify for Chapter 7 Bankruptcy in Arizona, you need to understand the exemptions and how they apply to your situation.

Arizona Bankruptcy Exemptions in Chapter 7 & Chapter 13 Bankruptcy Filings

What is a Bankruptcy Exemption Regarding Arizona Bankruptcy Filings?

Bankruptcy Exemptions are laws that protect your property when filing for bankruptcy. There are both State of Arizona Bankruptcy Exemptions and Federal Bankruptcy Exemptions. Bankruptcy exemptions are a way to level the playing field so that people can keep some of their property when they are considering filing for bankruptcy in Arizona.

Bankruptcy Exemptions in Arizona

Homestead Exemption

The homestead exemption in Arizona is $150,000. You may have up to $150,000 equity in your home, meaning your home can be worth more than that amount if you have enough balance left on your mortgage. For example, your home is worth $500,000 but your mortgage balance is $400,000. Your equity is $100,000, which is safely under the exemption limit of $150,000. Your house would be safe in the bankruptcy. However, let’s say your house is worth $300,000 and your balance is $100,000. Your equity would be $200,000, which is enough over the exemption limit for the bankruptcy trustee to pursue selling the home. The $150,000 would be returned to you, and any excess proceeds from the home sale would be distributed amongst your creditors. You will only have one homestead exemption to use, regardless of if you are married.

Motor Vehicles

In Arizona, you may have up to $6,000 equity in your vehicle in a Chapter 7 bankruptcy. If you are married, you may have two vehicles with up to $6,000 each or one vehicle with up to $12,000 equity. For example, if you are married and have a paid off car worth $5,000, and a financed vehicle worth $25,000 and a balance of $10,000, you could keep the paid in full car but would have to surrender the financed vehicle. The exemption limit for vehicles increases to $25,000 if the filer has a disability that requires special equipment in their vehicle.

Bank Accounts

When filing your bankruptcy petition, it is important that you pay close attention to your payday and bank account balance. In Arizona, you may either have $300 as a single filer or $600 as a married filer in one bank account on the day that you file. The trustee will request your bank statements to make sure that the balance matches what you listed on your petition. If you had more than the state exemption in your bank account on the day you filed, your trustee may require you to pay that amount towards your bankruptcy estate or have your case dismissed.

Personal Items & Household Goods

This exemption has a wide reach and can be used on furniture, electronics, and other miscellaneous items around your house. The exemption for a single filer is $6,000, which is doubled for married filers.


The exemption for clothing in Arizona is $500, which doesn’t increase for additional family members. Don’t forget to list your clothing as personal property on your petition, unless you plan on appearing at your 341 Meeting of Creditors without it.

Pets, Horses, etc.

While pets are often viewed more as a treasured family member than a piece of property, it wouldn’t be fair to let someone with a herd of thousand dollar designer puppies or an expensive equestrian habit to discharge their debts without acknowledging how valuable their pets are. The exemption for pets in Arizona is $500. Exemptions are based on the asset’s current value, so you probably don’t need to worry if you spent slightly more than that on a puppy or kitten that is now fully grown.

Engagement & Wedding Rings

While you should always try to be presentable for any court appearance, don’t wear your finest jewels to your 341 Meeting of Creditors. The exemption for rings in Arizona is $2,000.

Tools & Equipment

The exemption for this category is $5,000, and filers may not try to include a vehicle under this exemption to keep an extra vehicle. This is primarily for tools of the trade.

Pensions & Retirement Accounts

These are generally safe in bankruptcy in Arizona. The reasoning behind this is that requiring low-income debtors to surrender retirement savings will mean more government-funded support for these people in the future. Social security income is also entirely exempt in bankruptcy as an asset and for income qualification purposes.

Let Your Arizona Bankruptcy Lawyers Assist You With Bankruptcy Exemptions

Clearly, there are many things to keep in mind when deciding whether to file bankruptcy, which chapter to file, and how to best use the bankruptcy exemptions to your benefit. Exemption mistakes could result in you having to surrender beloved assets or your case being dismissed. That’s why you should, at the very least, consult with a bankruptcy attorney before filing your petition. Even if you think you can’t afford an attorney, our firm offers free consultations. We also offer affordable rates and payment plan options, so bankruptcy might be more affordable than you thought. Call to get started today.


Contact Professional Family Attorneys In Arizona

Arizona Offices:

Mesa Location:
1731 West Baseline Rd., Suite #100
Mesa, AZ 85202

Office: (480) 448-9800

Glendale Location:
20325 N 51st Avenue Suite #134, Building 5
Glendale, AZ 85308

Office: (602) 509-0955

Tucson Location:
2 East Congress St., Suite #900-6A
Tucson, AZ 85701

Office: (520) 441-1450

Avondale Location:
12725 W. Indian School Rd., Ste E, #101
Avondale, AZ 85392

Office: (623) 469-6603