What, exactly, are Arizona bankruptcy exemptions? Bankruptcy exemptions play an extremely important role in any bankruptcy proceedings. They will be used to determine what property you may be able to keep, or how much of your debt you will need to pay back.
Exemptions in Chapter 7 Bankruptcy
Because Chapter 7 bankruptcy is a liquidation bankruptcy, your assets can be sold at auction to pay back your debts. However, if you are able to exempt certain property, you may be able to keep it. Arizona law provides for certain exemptions that you can use to protect your property during your bankruptcy. Additionally, married couples may double certain (but not all) exemptions.
Arizona Homestead Exemption
The state of Arizona allows debtors to exempt up to $150,000 of their home or other property covered by the homestead exemption. This exemption cannot be doubled by married couples. Ariz. Rev. Stat. Ann. §§ 33–1101, 33–1103 and 33–1104.
Arizona Motor Vehicle Exemption
The state of Arizona allows for debtors to exempt up to $6,000 of one or more motor vehicles. Married couples as well as elderly or disabled individuals can double this exemption. Ariz. Rev. Stat. Ann. § 33–1125(8).
Arizona Personal Property Exemption
Debtors can exempt up to $6,000 in household furniture and appliances, $500 in clothing, $800 in animals, $2,000 in engagement and wedding rings and certain prescription health aids, just to name a few. Ariz. Rev. Stat. Ann. §§ 33–1123, 33–1125 and 33–1127.
These are only a few examples of common Chapter 7 bankruptcy exemptions. For more information regarding what you may be able to exempt, speak with a Phoenix bankruptcy lawyer.
Exemptions in Chapter 13 Bankruptcy
In a Chapter 13 bankruptcy, the trustee cannot sell your nonexempt assets. However, the amount you must pay your unsecured creditors will be determined by both your disposable income and your nonexempt assets. For example, if your disposable income allows you $700 a month over a five year period to pay back your debts, and $400 of that money goes toward your secured debts, then you have $300 left over to go toward your unsecured debts. The total value of your nonexempt assets cannot exceed $18,000 (the total cost of $300 a month over five years), or else you won’t have a workable repayment plan.
Phoenix Bankruptcy Attorney
The bankruptcy process can be complicated. You do not need to go through it alone. Contact an experienced Phoenix bankruptcy attorney from the Law Office of Nicholas Fuerst in Phoenix at (480) 755-1930.