WHAT ARE YOU ALLOWED TO KEEP (EXEMPTIONS) when you file a Bankruptcy?
The following are the Arizona State Exemptions:
ARIZONA STATE EXEMPTION STATUTES
NOTE: Doubling is permitted for noted exemptions by Arizona Revised Statutes § 33-1121.01.
HOMESTEAD
Real property; an apartment or mobile home you occupy to $150,000; A.R.S. § 33-1101
the amount of the homestead may be limited to $125,000 if it was purchased by the debtor within 1,215 days before filing bankruptcy.
sale proceeds exempt 18 months after sale or until new home purchased, whichever occurs first (husband and wife may not double) 33-1101
Must record homestead declaration before attempted sale of home 33-1102
PERSONAL PROPERTY (to $4,000 total, per person) 33-1123
husband and wife may double all personal property exemptions
Household furniture, furnishings and appliances personally used by debtor in an amount not to exceed $4,000 (fair market value):
– one kitchen and one dining room table with four chairs
each, plus one additional chair for each dependent of the debtor who resides in the household if the debtor and dependents exceed four in number
– one living room couch
– one living room chair, plus one additional chair for each department of the debtor who resides in the household
– three living room coffee or end tables
– three living room lamps
– one living room carpet or rug
– two beds, plus one additional bed for each dependent of the debtor who resides in the household – one bed-table, dresser and lamp for each bed allowed above
– bedding for each bed allowed above
– pictures, oil paintings and drawings, drawn or painted by debtor and family portraits in their necessary frames
– one television set or radio or stereo
– one radio alarm clock
– one stove
– one refrigerator
– one washing machine
– one clothes dryer
– one vacuum cleaner
One car with a fair market value not to exceed $5,000. If debtor is physically disabled, the fair market value of the motor vehicle shall not exceed $10,000. A.R.S. § 33-1125(8)
All food, fuel and provisions for debtor’s individual or family use to last up to six months A.R.S. § 33-1124
All wearing apparel used primarily for personal, family or household purposes with a fair market value not to exceed $500 A.R.S. § 33-1125(1)
All musical instruments for debtor’s individual or family use with an aggregate fair market value not to exceed $250 A.R.S. § 33-1125(2)
Domestic pets, horses, milk cows and poultry with a fair market value not to exceed $500 A.R.S. § 33-1125(3)
All engagement and wedding rings with a fair market value not to exceed $1,000 A.R.S. § 33-1125(4)
Debtor’s library, including books, manuals, published materials and personal documents not with a fair market value not to exceed $250 A.R.S. § 33-1125(5)
One watch with a fair market value not to exceed $100 A.R.S. § 33-1125(6)
One typewriter, one bicycle, one sewing machine, a family bible, a burial plot, one shotgun or one rifle or one pistol, with a fair market value not to exceed $500 A.R.S. § 33-1125(7)
Professional prescribed prostheses for debtor or a dependent of the debtor, including a wheelchair A.R.S. § 33-1125(9)
Life insurance proceeds not to exceed $20,000 if payable to surviving spouse or child upon the life of a deceased spouse, parent or legal guardian. A.R.S. § 33-1126(A)(1)
Minor child’s earnings unless debt to be discharged was contracted for the special benefit of the minor child. A.R.S. § 33-1126(A)(2)
Child support or spousal maintenance received pursuant to a court order. A.R.S. § 33-1126(A)(3)
All money, proceeds or benefits from employer health, accident, disability insurance benefits or similar employer benefit program. A.R.S. § 33-1126(A)(4)
All proceeds from destruction of or damage to exempt property and all proceeds or benefits arising from fire or other insurance on exempt property. A.R.S. § 33-1126(A)(5)
Cash surrender value of life insurance policies where for a continuous unexpired period of two years such policies have been owned by a debtor and have named as beneficiary the debtor’s surviving spouse, child, parent, brother or sister, or any other dependent family member, except for the amount of any premium that is avoidable by a creditor as a fraudulent transfer. A.R.S. § 33-1126(A)(6) and A.R.S.§ 20-1131(D)
An annuity contract where for a continuous unexpired period of two years such contract has been owned by a debtor and has named as beneficiary the debtor, debtor’s surviving spouse, child, parent, brother or sister, or any other dependent family member, except for the amount of any premium that is avoidable by a creditor as a fraudulent transfer A.R.S. § 33-1126(A)(7)
Any claim for damages for levy upon or sale under execution of exempt personal property or for wrongful taking or detention of exempt personal property. Does not apply to annuities, nor to cash surrender values increased by premium payments made within two years in excess of the average annual premium paid during the previous three years. A.R.S. § 33-1126(A)(8)
Bank deposit not to exceed $150. This sum is not exempt from normal service charges assessed by the bank holding the funds. A.R.S. § 33-1126(A)(9)
Benefits from ERISA-qualified retirement plan or deferred compensation plan except those amounts contributed within 120 days before a debtor files for bankruptcy. Does not apply to an alternate payee under a qualified domestic relations order. Not exempt from orders resulting from a judgment for child support arrearages or child support debt. A.R.S. § 33-1126(B).
IRA (In re Herrsher, 121 B.R. 29 (D.Ariz1990)
Prepaid rent, including security deposits as provided in §33-1321(A) for debtor’s residence, not exceeding the lesser of $1,000 or 1½ month’s rent where debtor has not claimed a homestead exemption. Not exempt from orders resulting from a judgment for child support arrearages or child support debt. A.R.S. § 33-1126(C)
Exemptions listed in § 33-1126 are not exempt property from orders resulting from a judgment for child support arrearages or child support debt A.R.S. § 33-1126(D)
Group life insurance policy or proceeds A.R.S. § 20-1132
Library and philosophical and chemical or other apparatus used for instruction of youth in any university, college, seminary of learning, or school A.R.S. § 33-1127
Tools, equipment, instruments and books of debtor or debtor’s spouse primarily used and necessary to carry on the commercial activity, trade, business or profession of debtor or debtor’s spouse, with a fair market value not to exceed $2,500. Tools does not include a motor vehicle primarily used for personal, family or household purposes such as transportation to debtor’s employment. A.R.S. § 33-1130(1)
Farm machinery, utensils, implements of husbandry, feed, seed, grain and animals belonging to debtor, with a value not to exceed $2,500, where debtor’s primary income is derived from farming A.R.S. § 33-1130(2)
All arms, uniforms and accoutrements required by law to be kept by a debtor A.R.S. § 33-1130(3)
Seventy-five percent (75%) of disposable earnings. Only one half of disposable income may be claimed exempt in response to an order for support of any person. These exemptions do not apply in a Chapter 13 bankruptcy filing. “Disposable earnings” means that remaining portion of a debtor’s wages, salary or compensation for his personal services, including bonuses and commissions, or otherwise, and includes payments pursuant to a pension or retirement program or deferred compensation plan, after deducting from such earnings those amounts required by law to be withheld. A.R.S. § 33-1131(B),(C), (D)
Waiver of exemption rights void and unenforceable unless specifically provided in § 33-1122 and when done with notice A.R.S. § 33-1132
PUBLIC BENEFITS
Unemployment compensation benefits are exempt where proceeds are not commingled with other funds, except debts incurred for necessaries furnished to the individual or his or her spouse or dependents during the time when the individual was employed A.R.S. § 23-783
Workers’ compensation benefits A.R.S. § 23-1068
When can you use ARIZONA Exemptions and when must you use other exemptions:
The state you use for your exemptions is:
The state you lived in for the 730 days (2 years) before filing; or
*If you did not live in a single state in the previous 2 years you use the state where you lived the majority of the 180 period preceding the 2 year period; or
If the preceding renders you ineligible for any exemptions then the debtor is allowed to choose the federal exemptions.
Current Arizona residents may claim the homestead and exemptions made available by Arizona law only if they resided in Arizona two years before the bankruptcy filing.
If the debtor did not reside in Arizona for all of those two years, then the debtor must claim the exemptions provided by the state where the debtor resided for the greater part of the six months between two years and two and a half years before the bankruptcy filing. 11 U.S.C. §522(b)(3)(A).
If the debtor is ineligible to claim exemptions provided by that state’s law, then the debtor may claim exemptions provided in Bankruptcy Code § 522(d) (Federal Exemptions).
The exemption for a homestead is limited to $125,000 if the property was acquired within the previous 1215 day (3.3 years). The cap is not applicable to any interest transferred from a debtor's previous principal residence (which was acquired prior to the beginning of such 1215-day period).
What does the Court and the Trustee consider Property of the estate:
Below is the Law!If you really, really want to know more about Bankruptcy, read it.
§ 541. Property of the estate
(a)The commencement of a case under section 301, 302, or 303 of this title creates an estate. Such estate is comprised of all the following property, wherever located and by whomever held:
(1)Except as provided in subsections (b) and (c)(2) of this section, all legal or equitable interests of the debtor in property as of the commencement of the case.
(2)All interests of the debtor and the debtor’s spouse in community property as of the commencement of the case that is—
(A)under the sole, equal, or joint management and control of the debtor; or
(B)liable for an allowable claim against the debtor, or for both an allowable claim against the debtor and an allowable claim against the debtor’s spouse, to the extent that such interest is so liable.
(3)Any interest in property that the trustee recovers under section 329 (b), 363 (n), 543, 550, 553, or 723 of this title.
(4)Any interest in property preserved for the benefit of or ordered transferred to the estate under section 510 (c) or 551 of this title.
(5)Any interest in property that would have been property of the estate if such interest had been an interest of the debtor on the date of the filing of the petition, and that the debtor acquires or becomes entitled to acquire within 180 days after such date—
(A)by bequest, devise, or inheritance;
(B)as a result of a property settlement agreement with the debtor’s spouse, or of an interlocutory or final divorce decree; or
(C)as a beneficiary of a life insurance policy or of a death benefit plan.
(6)Proceeds, product, offspring, rents, or profits of or from property of the estate, except such as are earnings from services performed by an individual debtor after the commencement of the case.
(7)Any interest in property that the estate acquires after the commencement of the case.
(b)Property of the estate does not include—
(1)any power that the debtor may exercise solely for the benefit of an entity other than the debtor;
(2)any interest of the debtor as a lessee under a lease of nonresidential real property that has terminated at the expiration of the stated term of such lease before the commencement of the case under this title, and ceases to include any interest of the debtor as a lessee under a lease of nonresidential real property that has terminated at the expiration of the stated term of such lease during the case;
(3)any eligibility of the debtor to participate in programs authorized under the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.; 42 U.S.C. 2751 et seq.), or any accreditation status or State licensure of the debtor as an educational institution;
(4)any interest of the debtor in liquid or gaseous hydrocarbons to the extent that—
(A)
(i)the debtor has transferred or has agreed to transfer such interest pursuant to a farmout agreement or any written agreement directly related to a farmout agreement; and
(ii)but for the operation of this paragraph, the estate could include the interest referred to in clause (i) only by virtue of section 365 or 544 (a)(3) of this title; or
(B)
(i)the debtor has transferred such interest pursuant to a written conveyance of a production payment to an entity that does not participate in the operation of the property from which such production payment is transferred; and
(ii)but for the operation of this paragraph, the estate could include the interest referred to in clause (i) only by virtue of section 365 or 542 of this title;
(5)funds placed in an education individual retirement account (as defined in section 530(b)(1) of the Internal Revenue Code of 1986) not later than 365 days before the date of the filing of the petition in a case under this title, but—
(A)only if the designated beneficiary of such account was a child, stepchild, grandchild, or stepgrandchild of the debtor for the taxable year for which funds were placed in such account;
(B)only to the extent that such funds—
(i)are not pledged or promised to any entity in connection with any extension of credit; and
(ii)are not excess contributions (as described in section 4973(e) of the Internal Revenue Code of 1986); and
(C)in the case of funds placed in all such accounts having the same designated beneficiary not earlier than 720 days nor later than 365 days before such date, only so much of such funds as does not exceed $5,000;
(6)funds used to purchase a tuition credit or certificate or contributed to an account in accordance with section 529(b)(1)(A) of the Internal Revenue Code of 1986 under a qualified State tuition program (as defined in section 529(b)(1) of such Code) not later than 365 days before the date of the filing of the petition in a case under this title, but—
(A)only if the designated beneficiary of the amounts paid or contributed to such tuition program was a child, stepchild, grandchild, or stepgrandchild of the debtor for the taxable year for which funds were paid or contributed;
(B)with respect to the aggregate amount paid or contributed to such program having the same designated beneficiary, only so much of such amount as does not exceed the total contributions permitted under section 529(b)(7) of such Code with respect to such beneficiary, as adjusted beginning on the date of the filing of the petition in a case under this title by the annual increase or decrease (rounded to the nearest tenth of 1 percent) in the education expenditure category of the Consumer Price Index prepared by the Department of Labor; and
(C)in the case of funds paid or contributed to such program having the same designated beneficiary not earlier than 720 days nor later than 365 days before such date, only so much of such funds as does not exceed $5,000;
(7)any amount—
(A)withheld by an employer from the wages of employees for payment as contributions—
(i)to—
(I)an employee benefit plan that is subject to title I of the Employee Retirement Income Security Act of 1974 or under an employee benefit plan which is a governmental plan under section 414(d) of the Internal Revenue Code of 1986;
(II)a deferred compensation plan under section 457 of the Internal Revenue Code of 1986; or
(III)a tax-deferred annuity under section 403(b) of the Internal Revenue Code of 1986;
except that such amount under this subparagraph shall not constitute disposable income as defined in section 1325 (b)(2); or
(ii)to a health insurance plan regulated by State law whether or not subject to such title; or
(B)received by an employer from employees for payment as contributions—
(i)to—
(I)an employee benefit plan that is subject to title I of the Employee Retirement Income Security Act of 1974 or under an employee benefit plan which is a governmental plan under section 414(d) of the Internal Revenue Code of 1986;
(II)a deferred compensation plan under section 457 of the Internal Revenue Code of 1986; or
(III)a tax-deferred annuity under section 403(b) of the Internal Revenue Code of 1986;
except that such amount under this subparagraph shall not constitute disposable income, as defined in section 1325 (b)(2); or
(ii)to a health insurance plan regulated by State law whether or not subject to such title;
(8)subject to subchapter III of chapter 5, any interest of the debtor in property where the debtor pledged or sold tangible personal property (other than securities or written or printed evidences of indebtedness or title) as collateral for a loan or advance of money given by a person licensed under law to make such loans or advances, where—
(A)the tangible personal property is in the possession of the pledgee or transferee;
(B)the debtor has no obligation to repay the money, redeem the collateral, or buy back the property at a stipulated price; and
(C)neither the debtor nor the trustee have exercised any right to redeem provided under the contract or State law, in a timely manner as provided under State law and section 108 (b); or
(9)any interest in cash or cash equivalents that constitute proceeds of a sale by the debtor of a money order that is made—
(A)on or after the date that is 14 days prior to the date on which the petition is filed; and
(B)under an agreement with a money order issuer that prohibits the commingling of such proceeds with property of the debtor (notwithstanding that, contrary to the agreement, the proceeds may have been commingled with property of the debtor),
unless the money order issuer had not taken action, prior to the filing of the petition, to require compliance with the prohibition.
Paragraph (4) shall not be construed to exclude from the estate any consideration the debtor retains, receives, or is entitled to receive for transferring an interest in liquid or gaseous hydrocarbons pursuant to a farmout agreement.
(c)
(1)Except as provided in paragraph (2) of this subsection, an interest of the debtor in property becomes property of the estate under subsection (a)(1), (a)(2), or (a)(5) of this section notwithstanding any provision in an agreement, transfer instrument, or applicable nonbankruptcy law—
(A)that restricts or conditions transfer of such interest by the debtor; or
(B)that is conditioned on the insolvency or financial condition of the debtor, on the commencement of a case under this title, or on the appointment of or taking possession by a trustee in a case under this title or a custodian before such commencement, and that effects or gives an option to effect a forfeiture, modification, or termination of the debtor’s interest in property.
(2)A restriction on the transfer of a beneficial interest of the debtor in a trust that is enforceable under applicable non-bankruptcy law is enforceable in a case under this title.
(d)Property in which the debtor holds, as of the commencement of the case, only legal title and not an equitable interest, such as a mortgage secured by real property, or an interest in such a mortgage, sold by the debtor but as to which the debtor retains legal title to service or supervise the servicing of such mortgage or interest, becomes property of the estate under subsection (a)(1) or (2) of this section only to the extent of the debtor’s legal title to such property, but not to the extent of any equitable interest in such property that the debtor does not hold.
(e)In determining whether any of the relationships specified in paragraph (5)(A) or (6)(A) of subsection (b) exists, a legally adopted child of an individual (and a child who is a member of an individual’s household, if placed with such individual by an authorized placement agency for legal adoption by such individual), or a foster child of an individual (if such child has as the child’s principal place of abode the home of the debtor and is a member of the debtor’s household) shall be treated as a child of such individual by blood.
(f)Notwithstanding any other provision of this title, property that is held by a debtor that is a corporation described in section 501(c)(3) of the Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such Code may be transferred to an entity that is not such a corporation, but only under the same conditions as would apply if the debtor had not filed a case under this title.
