Bankruptcy exemptions are provided under both federal and state laws. These exemptions allow those filing for bankruptcy to keep some of their property out of the hands of the bankruptcy trustee. This ensures that following the bankruptcy people are not left destitute or without any personal property.
According to the United States Bankruptcy Court, a variety of personal property is exempt. In order to qualify for these exemptions, a person must have lived in Arizona for the two years preceding the bankruptcy filing. If a person meets this requirement then they will be entitled to keep many of their things.
First, people are allowed to keep many of their basic necessities. People will be able to keep their clothes, and other wearing apparel up to a value of $500 for the entire family. A watch worth up to $150 can also be exempt. Up to six months' worth of fuel, food and other provisions is also allowed.
Under the Arizona laws, people may also keep a certain number of household goods. These goods can include necessities like furniture and appliances, but it can also include electronics and other consumer goods up to a total fair market value of $6,000. People may also keep up to $6,000 worth of equity in a car.
Other non-necessities can also be exempt under Arizona law. These include the following:
- Pets and farm animals worth up to $500
- Musical instruments worth $400
- Books worth up to $250
- Computer, sewing machine, gun, bike or burial plot up to $1,000
- Wedding or engagement rings worth $2,000
If a married couple is filing together then the value of these exemptions can be doubled.
People considering bankruptcy in Arizona should be aware of these exemptions and others. To make sure they take full advantage of the available exemptions, people should discuss their situation with a qualified attorney.
Source: United States Bankruptcy Court: District of Arizona, "Exemptions in Arizona," accessed on July 27, 2014