In Arizona, bankruptcy exemptions help protect certain assets from being liquidated during Chapter 7 bankruptcy or from being included in a repayment plan under Chapter 13 bankruptcy. Here are the most common Arizona bankruptcy exemptions:
- Homestead Exemption:
- Protects up to $250,000 of equity in your primary residence.
- Motor Vehicle Exemption:
- Protects up to $6,000 of equity in one motor vehicle.
- If the debtor or their dependent has a disability, the exemption increases to $12,000.
- Personal Property Exemptions:
- Household goods, furniture, and appliances: Up to $6,000 total.
- Clothing: Up to $500 total.
- Food, fuel, and provisions: Up to six months’ supply.
- Engagement and wedding rings: Up to $2,000.
- Pets, including horses, milk cows, and poultry: Up to $800 total.
- Tools of the Trade:
- Tools, equipment, books, and implements used in a trade or profession: Up to $5,000 total.
- Wages and Income:
- 75% of disposable earnings or 30 times the federal minimum wage, whichever is greater.
- Retirement Accounts:
- Tax-exempt retirement accounts such as 401(k)s and IRAs: Unlimited protection for IRAs and Roth IRAs up to $1,512,350.
- Public retirement benefits and pensions are generally fully exempt.
- Insurance Benefits:
- Health aids prescribed by a professional: Fully exempt.
- Life insurance policies with loan or cash surrender values up to $25,000, provided the beneficiary is a dependent.
- Public Benefits:
- Social Security benefits, unemployment compensation, workers’ compensation, and veterans’ benefits are generally fully exempt.
These exemptions are subject to change, and specific details can vary. Consulting with a bankruptcy attorney familiar with Arizona law can provide the most accurate and tailored advice for your situation.
