Will I Lose Everything If I Declare Bankruptcy in Arizona?
A concern for many contemplating bankruptcy is that they will lose everything, which is not the case in Arizona. In Arizona, certain types of property are expressly excluded from the bankruptcy estate, such as homes, cars and many personal sentimental pieces of property such as wedding rings and some furniture.
September 14, 2012
With an economy already suffering from a disastrous housing market, Arizonans continue to be buried under seemingly endless mountains of debt. It is important to note, however, that many of those getting deeper in debt are not doing so by freely buying frivolous products; many simply cannot afford to pay off debt because they have fallen on hard times - all the while the interest merely adds to the person's debt.The loss of job or unexpected medical bills can easily create a situation in which a person falls behind on their bills for the first time in their lives. Many in Arizona cannot fathom how in the world they will ever be able to get out from under their debt, which is why some see an Arizona Chapter 7 bankruptcy as the best option for a fresh start.
Arizona Bankruptcy Exemptions
A concern for many contemplating bankruptcy is that they will lose everything - which is not the case in Arizona. In Arizona, certain types of property are expressly excluded from the bankruptcy estate - often referred to as exemptions - which means a debtor will not lose these assets if they decide to file for a Chapter 7 bankruptcy.
While federal law usually governs bankruptcy law, Arizona has elected to "opt-out" of the federal exemptions and create their own exemptions. For example, some of the more well-known exemptions in Arizona include a debtor's home (up to a value of $150,000) and car (up to a value of $5,000).
However, the list of Arizona exemptions also includes lesser-known forms of personal property that have a lower market value - but higher sentimental value. These exemptions include wedding rings (up to value of $1,000) and clothes (up to a fair market value of $500).
But, the list doesn't end there. Arizona law delineates some additional household items that are exempt, including:
- One kitchen and dining room table
- One couch
- One living room chair, plus one chair for each dependent living in the household
- Three living room tables
- Three living room lamps
- One living room rug
- Two beds, plus one bed for each dependent living in the household
- One nightstand, dresser and lamp for each bed allowed
- One television
- One stove
- One refrigerator
- One clothes washer and dryer
Keep in mind that all of these particular items listed are merely exempt up to a fair market value of $4,000, and as these exemptions illustrate, bankruptcy can be a difficult and complex process - especially when you risk losing some of your most personal effects. If you find yourself overly burdened by debt, it may be a good idea to speak with an experienced bankruptcy attorney in your area to be advised as to your best options.
Article provided by Arizona Law Group of Trezza & Associates, LLC
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