You Don’t Lose Everything When Filing for Bankruptcy!
When you file a bankruptcy, it creates a bankruptcy estate, which consists of everything that you own. State and federal law allows you to protect certain property from your creditors and from sale during the bankruptcy case. These laws are called exemptions.
In Arizona, the Arizona exemptions apply, as long as you have lived in Arizona for the last two years. There are also federal laws that protect things such as social security income, retirement accounts, and veteran’s benefits, among others.
If you have not lived in Arizona for the last two years, then you can use the exemptions from the state that you resided in previously, as long as you lived there for two years. If that is not the case, you may have to use federal exemptions.
Homestead Exemption
In Arizona, you can protect $150,000 of your primary residence’s equity.
-You must actually reside in the home to claim the exemption.
-The exemption applies to a mobile home, even if you do not own the ground it sits on.
-You cannot double the exemption if you are married.
Personal Property Exemptions
You can protect many items of personal property, and if you are a married, these exemptions double. Here are just a few examples:
-Six months of food, fuel, and provisions.
-$6,000 for household goods and furnishings.
-$500 for clothing.
-$400 for musical instruments.
-$1,000 for horses, milk cows, and poultry.
-$2,000 for wedding and engagement rings.
-$250 for books, manuals, and published materials.
-$250 for a watch.
-$2,000 collectively for one typewriter, one computer, one bicycle, one sewing machine, a family bible or a lot in any burial ground.
-$6,000 for the equity in one motor vehicle. $12,000 if you or your dependent are disabled.
-Professionally prescribed prostheses, including a wheelchair or motorized mobility device.
-$2,000 for a collection of firearms.
-All domestic animals or household pets.
-$300 in one bank account (only on the day the case is filed).
This is not an exhaustive list, so you may have property that is exempt not listed here.