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Good News for Arizona Bankruptcy Filers….Newly Updated Arizona Bankruptcy Exemptions to Take Effect September 13, 2013!

© 2013

So what exactly is a bankruptcy exemption and why is it good news for people filing bankruptcy in Arizona that these exemptions have been updated? All people who file bankruptcy own assets. Assets are the real property and personal property that a person owns. Examples of assets include a person’s house, car, couch, clothes, pets (yes, even pets) etc. Everything a person owns is an asset. Arizona’s bankruptcy exemptions protect these assets up to certain dollar limits, depending on the type of asset owned. Not all assets a person owns are protected by an Arizona bankruptcy exemption, however, most people who file bankruptcy do keep all of their assets.

On September 13, 2013, the Arizona Legislature’s House Bill 2325 (“HB 2325”) will take effect, which will result in an increase of several of the dollar limits of the Arizona bankruptcy exemptions. Following is a list of the newly updated exemptions which will prove beneficial for all individuals filing bankruptcy in Arizona.

Household Goods and Furnishings:

The old exemption allowed for protection of the aggregate $4,000.00 of specifically outlined household goods and furnishings, e.g. one living room chair, three living room coffee or end tables, one refrigerator, one television, one washer, one dryer etc.

The updated exemption is broadened and adds protection for appliances and electronics up to a new dollar limit of an aggregate $6,000.00. The exemption also includes protection of these assets used not only by the debtor but also by the debtor’s dependent(s).

Motor Vehicles:

The old vehicle exemption allowed for protection of the equity in one motor vehicle used by debtor in the amount of $5,000.00

The newly updated exemption allows for protection of the equity in one motor vehicle not in excess of the fair market value of $6,000.00, and again includes protection of the same for debtor’s dependent(s).  If the debtor or debtor’s dependent is physically disabled, the fair market value of equity in the motor vehicle shall not exceed $12,000.00.

Engagement and Wedding Rings:

The old exemption allowed for protection of a debtor’s wedding or engagement ring up to the dollar limit of $1,000.00.

The newly updated exemption allows for protection of a debtor’s wedding or engagement rings up to the dollar limit of $2,000.00.


A computer has now been added as an asset that can be protected when filing bankruptcy and is included in the exemption that also protects one typewriter, one bicycle, one sewing machine, a family bible, a lot in any burial ground, one shotgun, or one rifle or one pistol, not in excess of the aggregate value fair market value of $1,000.00 (used to be $500.00 dollar limit).

Musical Instruments:

The old exemption allowed for protection of all musical instruments for the debtor’s individual or family use not in excess of an aggregate fair market value of $200.00, which has now been increased to protect $400.00 in musical instruments.

Domestic Pets, Horses, Milk Cows and Poultry:

A pet is an asset and must be listed but this of course does not mean you will have to give up your precious pet, nevertheless, the pet(s) still needs to be disclosed in your bankruptcy petition. The exempt amount to protect your animals was increased from a $500.00 to $800.00 in value.

In looking at some of the changes made by the Arizona Legislature, one can see that it was time to do some updating to these exemptions and the changes made will prove very helpful to Arizona bankruptcy filers.

As I mentioned earlier, some people filing bankruptcy own assets that are not protected by the Arizona bankruptcy exemptions. Many bankruptcy filers make the mistake of not consulting with a knowledgeable bankruptcy attorney regarding assets that may not be protected when filing bankruptcy. This can often lead to major problems in the actual bankruptcy proceeding.  I want my clients to have a smooth and uninterrupted bankruptcy process and am happy to discuss any concerns you may have when considering bankruptcy. Often times just getting some initial questions answered can provide relief in what typically is a very stressful time for individuals.  Please contact my office so I may assist in helping answer some of those questions that may be lingering as you consider your options regarding bankruptcy.

Article By: Whitney G. Coats, J.D.

Whitney G. Coats, J.D., Of Counsel, is a bankruptcy attorney who works with the Dana Law Firm in its Consumer Bankruptcy Department.