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Bankruptcy exemptions may be available to protect assets

A number of people are likely aware that consumers have personal bankruptcy options available to them. Among personal bankruptcy options for consumers is Chapter 7 liquidation bankruptcy which is available in certain circumstances. Consumers considering filing for bankruptcy may wonder, however, what the process looks like and if any of their assets are protected from the bankruptcy process.

In Arizona, there are a number of bankruptcy exemptions to protect exempt assets from the bankruptcy process. Non-exempt assets are liquidated through the Chapter 7 bankruptcy process to repay creditors. There are a number of different categories of exemptions, however, that may protect certain assets belonging to the filing party. One type of exemption, for instance, is the homestead exemption which protects the filing party's real property interest where the filing party resides up to $150,000.

In addition, personal property, including household goods, is exempted up to $6,000 which is an amount that can be doubled by a husband and wife. A number of additional categories of personal property are protected as well. Retirements and pensions may also enjoy exemption protection in certain circumstances. A number of additional exemptions may be available by law and depending on the circumstances.

Personal bankruptcy options are available to provide a fresh financial start for individuals struggling with the stresses and burdens of debt. While a Chapter 7 bankruptcy provides for the filing party to liquidate their assets to repay creditors and enjoy a fresh financial start, individuals considering filing for bankruptcy should be reassured that certain types and categories of property are protected from the bankruptcy process and may enjoy an exempted status.

Source: United States Bankruptcy Court District of Arizona, "Exemptions in Arizona," Accessed May 13, 2015