When Arizona residents begin to struggle financially, there are many hard decisions to be made. It is difficult to try to determine where expenses can be cut and how income can be augmented. Unfortunately, financial challenges and growing debt, often due to unexpected emergencies or medical expenses, sometimes become such a burden that people start to wonder if they will ever get ahead. Although some people delay in filing bankruptcy because of fears they will lose everything they own, there are many bankruptcy exemptions that allow people to protect some personal property while still eliminating crushing debt.
In Arizona, bankruptcy filings have continued to rise throughout the year, recently hitting a near six-month peak in May. Although unemployment throughout the state has dropped slightly, inflation continues and wages are not commensurate. The high numbers of bankruptcy filings are believed to be connected with tax season, which generally sees an increase in filings. It may also be the result of recent changes in exemptions during bankruptcy, raising the amount from $4,000 to $6,000.
Although bankruptcy is a big decision and requires Arizona residents to make some tough choices, it does not mean forfeiting or selling everything people have worked hard to obtain over the years. Bankruptcy exemptions allow people filing for bankruptcy to keep some of their personal property instead of requiring that it be used to pay creditors.
There are many different categories of exemptions, which help prevent consumers from being left with nothing after filing bankruptcy. Your home is generally exempt, up to $150,000, as well as some retirement accounts and pensions. Tools and equipment needed for school or firefighting are also protected under exemption law. Insurance benefits, spousal and child support, children's earnings and life insurance proceeds can also be exempted. Finally, a variety of personal property, such as wedding rings, cars, pets or animals, household furnishings and appliances, and clothing, may also be protected.
Source: Digital Journal, "Arizona bankruptcy filings continue near six-month peak," Charles M. Sabo, June 22, 2013