Bankruptcy is a system of federal law, so the process to file for Chapter 7 bankruptcy or to file for Chapter 13 bankruptcy is nearly identical in every state, including Arizona. However, Arizona state law plays an important role, particularly in setting property exemptions, which determine what property you get to keep (if you file for Chapter 7) and how much you have to repay to your creditors (if you file for Chapter 13). There are also important resources available to you by state.
Arizona Credit Counseling
Before you file for Chapter 7 or Chapter 13 bankruptcy in Arizona, you will have to complete mandatory credit counseling with an agency that’s been approved by the United States Trustee’s Office. Here are the Arizona agencies that have been approved to provide this counseling.
Where to File
Arizona has bankruptcy courts in Tucson, Phoenix, Flagstaff, Yuma, and Prescott. At the Arizona bankruptcy court's website, you can find information on forms, local rules, and more.
Like every other state, Arizona has its own set of property exemptions. (To learn more about how property exemptions work generally and which exemptions are available to you, see Bankruptcy Exemptions: What Do I Keep When I File for Bankruptcy?)
In Arizona, you must use the state’s exemption list; although some states allow debtors to choose between the state list and a federal list, Arizona isn’t among them.
Arizona provides a generous homestead exemption that protects up to $150,000 in equity in a house or other real property. Arizona law also allows debtors to keep food and fuel for up to six months, and up to $5,000 equity in a vehicle. Here’s the whole list of Arizona exemptions.
The Means Test
When you file for bankruptcy, you must compare your income to the median income in Arizona for a household of your size. If your income is less than the median, you will be eligible to file for Chapter 7 and, if you choose to file for Chapter 13, you can use a three-year repayment plan (rather than five years).
Currently, the median Arizona income for a four-person household is over $61,000; these figures change periodically. You can find the most recent amounts on the website of the U.S. Trustee at www.justice.gov/ust. Click on “Bankruptcy Reform,” and then “Means Testing Information.” Or go directly to the Census Bureau table here..
Arizona Debtor Education
After you file for bankruptcy but before you receive your discharge, you must take a debtor education course. Like the mandatory credit counseling you must take before filing your forms, you must receive debtor education from an agency approved by the U.S. Trustee’s Office. Here are the Arizona agencies approved to provide this education.
Finding a Bankruptcy Lawyer
If you're considering bankruptcy, you may want to talk to an experienced Arizona bankruptcy lawyer.