Bankruptcy Exemptions in Arizona
When you file for bankruptcy, it is important to note that some of your assets are protected by “exemptions” laws. If an asset falls under these laws, the debtor is allowed to keep the item when filing for bankruptcy. Usually, these assets are protected only if the court decides that the asset’s value falls under a certain limit. Some states follow federal government exemption guidelines for bankruptcies, however, Arizona is one of a few states that has its own exemptions. In fact, Arizona allows more assets at higher values than states that follow federal guidelines. For debtors facing a bankruptcy in Arizona, this can be welcome news.
Even if you file for bankruptcy, your home may still be protected. The homestead exemption can be used to protect the primary resident of the single or married debtor. The debtor will be allowed to keep up to $150,000 in home equity, as well. If the debtor has more equity, the debtor might be ordered to pay the excess equity to the bankruptcy court. If this excess is not paid, it is more likely that the bankruptcy could be dismissed. A bankruptcy trustee might decide the best course of action is to force a sale of the home. If this happens, the debtor is still allowed to keep the $150,000 in equity. Any excess will be used to pay creditors. This helpful exemption may be used only once when filing for bankruptcy.
The vehicle exemption allows a bankruptcy filer to keep his vehicle as long as it has less than $5,000 in equity. A married couple who files for bankruptcy protection can use two, $5,000 exemptions toward two vehicles. Any vehicle equity over those amounts will be treated as it would with the homestead exemption.
Personal property exemptions include items such as appliances, household furniture and furnishings. Married couples can protect up to $8,000 in assets, while single debtors may protect up to $4,000 of assets. These items are assessed at their used value, rather than if they were new items. A detailed list of all of these personal assets must be given to the court.
There also are miscellaneous assets that are protected up to a certain set value. These values are based on bankruptcy laws and might include items such as tools or equipment used for commercial activity. Wedding jewelry, clothing, hobby items, musical instruments, books, weapons and some life insurance proceeds are other miscellaneous assets that may be allowed and have specific value limits set by bankruptcy codes.
Several types of retirement assets also are protected by bankruptcy laws. These include qualified retirement assets, such as IRA, 401k, state retirement funds and so on. These are protected with no limit on their value.
Some future assets also are protected by bankruptcy code. If the debtor has employee stock purchase plans that have not been vested or a future interest in a business, these potential future assets generally are protected. Annuities that have not yet been vested are another example of an asset that may be exempted.
Stephen Trezza has successfully handled thousands of cases, including filing many Phoenix bankruptcy cases. For further details regarding Phoenix bankruptcy attorneys, go to the FileBankruptcyinArizona site now.