Arizona bankruptcy exemptions go up, making now a good time to file

June 04, 2013 (Press-News.org) Arizona bankruptcy exemptions go up, making now a good time to file

Article provided by Carmichael & Powell, P.C.
Visit us at http://www.cplawfirm.com

For many consumers, bankruptcy can be a scary word. Yet, the apprehension is often alleviated simply by getting a better understanding of the process.

If you are struggling financially, Chapter 7 bankruptcy can be a great way to discharge your debts in a quick and efficient manner. But will you have to give up some of your property to partially repay creditors?

Chapter 7 is sometimes called "liquidation," and in some Chapter 7 bankruptcies, valuable assets are indeed sold or "liquidated" to partially repay creditors before debts are discharged. However, in the vast majority of Chapter 7 bankruptcies, filers do not have to give up any of their assets due to generous legal exemptions for a variety of different types of property. In Arizona, a law increasing the exemption amounts in many categories was recently signed by the governor, meaning Arizona residents who file for Chapter 7 bankruptcy will have even more of their property shielded from creditors.

Many exemptions will double under updated law

One of biggest wins for Chapter 7 filers is the increase and improvement of the household items exemption. Under the old law, Chapter 7 filers could keep up to $4,000 worth of household items, or $8,000 worth for couples, and there was a specific list of exactly what could be retained. For example, the old law would not permit Chapter 7 filers to keep more than one couch, or more than three living room lamps.

Under the new law, the household items exemption is increasing to $6,000 or $12,000 for couples, and filers may choose whichever household items they want as long as their total value falls below the exemption amount. Chapter 7 filers in Arizona will now be free to decorate to their tastes rather than adhering to arbitrary numerical limits on furniture items.

Other exemption amounts that are going up include those for wedding rings (from $1,000 to $2,000), motor vehicles (from $5,000 to $6,000), animals (from $500 to $800) and musical instruments (from $200 to $400). The exemption amount for miscellaneous items, including a typewriter, sewing machine, bicycle and firearm is also doubling, from $500 to $1,000, and a computer may now be included as a personal item.

The exemption for equity in a home is remaining unchanged. However, at $150,000, that exemption is already relatively generous.

Contact an Arizona attorney and find out what bankruptcy could do for you

With the new Arizona bankruptcy exemption limits going into effect in 2013, this could be a great year to explore what bankruptcy has to offer. If you are struggling financially, talk to an Arizona bankruptcy attorney today. With the right legal help, in a few short months you could be free from debt and on the path to a bright financial future.