Make a Payment
Call for a Free Consultation 480.568.2333

What is the homestead exemption in an Arizona bankruptcy?

When filing for bankruptcy in Arizona, there are many factors that will be worrisome with the entire process. One is which bankruptcy exemptions are available to retain certain assets as the process moves forward. It is important to understand the homestead exemption and what it entails. In general, a homestead is a dwelling in which the land and buildings are occupied by the owner. The homestead law protects it from being seized to pay for debt.

There are federal exemptions that the individual states are not required to adhere to. While the law in Arizona does not recognize exemptions that are available under federal law, there are exemptions that are available to residents of Arizona. The homestead exemption in Arizona protects as much as $150,000 of the equity the person has in a dwelling from being attached, executed or forcibly sold. An individual or married couple are only able to claim a single homestead exemption and are required to live in the dwelling.

A person will be able to live away from the dwelling for as long as two years without there being a waiver. The exemption is for the house and land, condo or co-op, mobile residence or mobile residence and land, and cash proceeds from the sale - voluntary or involuntary - of the property for as long as 18 months after it was sold. Since the maximum that can be protected is $150,000, the creditor can force a sale if the equity a person has is higher than that amount. The creditor is not able to to do this unless the proceeds from selling it covers the homestead exemption and all liens and encumbrances prioritized over the creditor to force the sale and its costs.

In most instances, if there is more than $150,000 in equity, the creditor might not be able to force the sale. There are other issues with the homestead exemption and bankruptcy exemptions that must be understood when filing for bankruptcy. For assistance with an exemption plan or a bankruptcy exemption of any kind, speaking to a legal professional is a wise first step.

Source:, "Arizona's Homestead Exemption," accessed on Jan. 11, 2016