Bankruptcy Exemptions – How to Protect Your Property During Bankruptcy

by John Skiba
Contact

A big concern of a most people going through bankruptcy have is whether they are going to lose all of their property. It is a valid concern but generally not one you need to worry much about. All states have exemption laws that protect certain property from creditors. A common example most people are aware of is the homestead exemption that protects a certain amount of equity in your home. The bankruptcy code even has its own set of federal exemptions to protect certain property.

Many states have opted out of the federal exemptions, preferring to craft their own exemptions to protect property. In Arizona we have opted out of the federal exemptions and in many instances the Arizona state exemptions are more generous than the federal ones, meaning that you can protect more of your property through the bankruptcy process.

Below are some examples of exempt property under Arizona law:

Homestead Exemption

In Arizona during bankruptcy you are entitled to an exemption of up to $150,000 in equity in your home. While this is great to have, I haven’t seen anyone with this amount of equity in years now. Interestingly when the real estate boom was occurring in 2006-2007 we often ran into the issue of having too much equity due to the rising house prices, and now, a few short years later almost no one has equity in their home in Arizona.

Exemption for Your Car

Each individual in Arizona is entitled to an exemption of up to $5,000 in equity in one car. If you are married you can double up your exemptions and protect up to $10,000 in equity on one car or you can divide them and each protect up to $5,000 on two cars. Important note here – married couples cannot divide their vehicle exemptions in any other fashion other than 50/50. What I mean by that is you cannot use $7,000 of the exemption to protect one car in bankruptcy and then use the remaining $3,000 of the exemption on a second car. It is $10,000 one car or up to $5,000 on two cars.

Wedding Rings Exemption

A big concern many have is if the bankruptcy court is going to require a sale of a wedding ring. Fortunately Arizona law provides an exemption for wedding rings of up to $2,000 in value. In valuing your property it is not automatically what you paid for it, but more along the lines of what it would reasonably sell for today.

Retirement Account Exemption

Retirement accounts such as 401(k) accounts and IRA accounts are exempt under both Arizona state law and federal law. Social Security is also exempt, meaning that your creditors cannot take this from you.

Exemption for Household Goods

Items such as furniture, appliances, and general household items are exempt in Arizona in the amount of $4,000 for each individual or $8,000 for a couple. I haven’t seen this really ever be an issue in bankruptcy. Not much resale value on the old couch, no matter what you paid for it.

The above are just a handful of the bankruptcy exemptions here in Arizona. The law provides protection for most personal property, and truthfully the statistics I have read show that 94% of chapter 7 bankruptcy filers in Arizona do not lose any property in the bankruptcy process.

I offer a free bankruptcy consultation where we can review your property and help you determine if you have any assets that would be at risk during bankruptcy and what we can do to protect them.

Arizona bankruptcy attorney John Skiba can be reached at (480) 420-4028 or via email at john@skibalaw.com .

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© John Skiba, Arizona Consumer Law Group, PLC | Attorney Advertising

Written by:

John Skiba
Contact
more
less

Arizona Consumer Law Group, PLC on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.