One of the biggest fears people have about filing for bankruptcy is the possibility of losing their home or vehicle. These are often essential to daily life—and emotionally important too. The good news is that Arizona bankruptcy laws include strong protections for your primary residence and vehicle, depending on your specific situation.
In this blog, we’ll explain how bankruptcy exemptions work in Arizona and how Arsenal Law helps clients keep what matters most.
It’s a common myth that filing for bankruptcy means giving up all your possessions. In reality, most people who file bankruptcy in Arizona are able to keep their home and car—especially if they are current on payments or have limited equity. Remember, the purpose of bankruptcy is to give people a fresh start so they can be in a strong financial position. It is not intended to punish people who need the protection through bankruptcy.
Whether you file Chapter 7 or Chapter 13, Arizona law provides exemptions that protect certain property from being sold to pay creditors.
As of 2023, Arizona law allows you to protect up to $400,000 in equity in your primary residence under the homestead exemption.
To qualify:
If your home equity is less than the exemption limit, the bankruptcy trustee cannot force a sale of your home in Chapter 7. If your equity exceeds that amount, you may still have options to protect the property in Chapter 13, where you can repay the value of the non-exempt equity over time.
Arizona law allows individuals to protect up to $15,000 of equity in one vehicle—or up to $25,000 if you have a disability. Married couples filing jointly may be able to protect two vehicles. These exemption amounts have significantly increased in recent years, which has made the exemptions much more valuable than they used to be.
If your car is fully paid off but under the exemption amount, it’s protected. If you’re still making payments and your equity is limited, it’s likely still safe.
In both Chapter 7 and Chapter 13:
In addition to your home and car, Arizona bankruptcy exemptions cover:
At Arsenal Law, we review your assets in detail and determine which bankruptcy chapter offers the best protection for your home, vehicle, and other property. Our careful planning and deep knowledge of Arizona exemption laws help you maximize what you keep while getting the debt relief you need.
We take pride in helping people get a fresh start without losing the things they care about.
Ready to Take the First Step?
If you're considering bankruptcy and worried about losing your home or car, contact Larson Law Office for a free consultation. We'll explain your options and help you protect what matters most.
???? Call 480-582-5228 or book online at www.ArsenalLawAZ.com
