Updated December 13, 2018
Like all states, Arizona has its own set of exemptions that you can use when filing for bankruptcy. Exemption law establishes the type of property you can protect. What happens to nonexempt property that you can't protect will depend on the bankruptcy chapter you file:
If you’d like to learn more, try reading When Is Chapter 7 Bankruptcy Better Than Chapter 13?
Some states allow debtors to choose between the state exemption system and a set of federal bankruptcy exemptions, but Arizona is not one of them. In Arizona, you must use the state exemptions below.
To learn more about bankruptcy exemptions, including how they work, which state exemption system you should use, and special rules for the homestead exemption, see Bankruptcy Exemptions – What Can I Keep When I File for Bankruptcy?
Arizona Bankruptcy Exemptions
Here is a list of some of the more common exemptions used in Arizona. Unless otherwise noted:
In addition to the following, you can also use any applicable amounts in the federal nonbankruptcy exemptions.
33-1101 - Up to $150,000. Includes apartments and mobile homes; and sale proceeds up to 18 months after the sale, or new home purchased, whichever occurs first. Husband and wife may not double. A filer can record a homestead declaration. §33-1102.
33-1125 - Motor vehicle up to $6,000 (or $12,000 if disabled
12-592 - Wrongful death awards.
32-1391.05 - Funeral deposits up to $5,000.
33-1123 - Household furniture and appliances not covered by other exemptions, up to 6,000 total.
33-1124 - Food and fuel for six months.
33-1125 - Clothing to $500; pets, horses, milk cows and poultry to $800; books to $250; wedding and engagement rings to $2,000; musical instruments to $400; watch to $150; health aids; and up to $1,000 total for bicycle, sewing machine, typewriter, computer, burial plot, firearm, and bible.
33-1126 - Proceeds for sold or damaged exempt property; prepaid rent or security deposit to lesser of $2,000 or 1.5 times rent (only if not claiming homestead); bank deposit to $300 in one account.
33-1131 - 75% of earned but unpaid net wages or 30 times the federal minimum hourly wage. 50% of wages for support orders. The judge may allow more for low-income debtors.
11 U.S.C. § 522 - Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit-sharing, and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans).
11 U.S.C. § 522(b)(3)(C)(n) - IRAS and Roth IRAs to $1,283,025. (This amount is set by federal law. You’ll find the updated amounts in Federal Bankruptcy Exemptions.)
9-931 - Police officers.
9-968 - Firefighters.
15-1628 - Members of the board of regents as well as administrative officers and faculty under the board's jurisdiction.
33-1126 - ERISA-qualified benefits, if deposited more than 120 days before filing. IRAs & Roth IRAs.
38-762 - Retirement and disability of state employees.
41-955 - Rangers.
48-227 - District employees.
38-850(c) - Public Safety Personnel Retirement System.
23-783 - Unemployment compensation.
23-1068 - Workers' compensation.
46-208 - Welfare benefits.
33-1127 - Teaching aids of a teacher.
33-1130 - Tools, equipment and books up to $5,000; Farm machinery, utensils, instruments of husbandry, feed, seed, grain and animals up to a total value of $2,500; and arms, uniforms, and equipment you are required by law to keep. (Subject to doubling)
20-877 - Fraternal benefit society benefits.
20-1131 - Life insurance proceeds if you have owned it at least two years and the beneficiary is a spouse or child.
20-1132 - Group life insurance policy or proceeds.
33-1126 - Life insurance proceeds if the beneficiary is spouse or child, up to $20,000. Disability, accident or health benefits. Proceeds or the cash value of life insurance or annuity contract if the beneficiary is a dependent member of the family and the contract has been owned longer than two years.
33-1126 - Alimony or child support. Minor child's earnings if the debt is not for a child.
This list includes the majority of bankruptcy exemptions available in Arizona. Be aware that:
It’s unlikely that the court will allow you to dismiss a case due to a misunderstanding about bankruptcy exemptions—especially if you file for Chapter 7 bankruptcy. It’s essential to protect your assets by verifying exemption availability with a local bankruptcy attorney.