Understanding Arizona's Bankruptcy Exemptions
You may have heard that certain people have to give up some of their money and property when they file Chapter 7 bankruptcy. You may have even heard that people who file bankruptcy come out of the process with nothing (which is not true).
At the Tucson law firm of Trezza & Associates, we will answer all of your questions about what you can keep after filing bankruptcy. In most cases, people can get through the process without giving up anything, but it is important to consult an attorney.
Don't hesitate to contact us to schedule a free consultation with experienced bankruptcy lawyer Stephen Trezza.
Will You Have to Give Up Your Home?
You may be concerned about whether you will be able to keep your home if you file Chapter 7 bankruptcy. In Arizona, the state legislature has decided to make it possible for many people to protect their homes from liquidation by the bankruptcy trustee.
If you have less than $150,000 of equity in a home that is your primary residence that is on 2.5 acres or less and you have resided in Arizona for the past two continuous years, it is exempt and you can keep it after filing Chapter 7.
Very few people who are in a position to consider bankruptcy have more than $150,000 of home equity. Of course, you need to keep making your mortgage payments on time if you want to avoid foreclosure. Chapter 7 does not eliminate your mortgage responsibilities.
Also, even if you are legally allowed to keep your home, you may want to consider whether giving it up will help you make a fresh start financially, especially if you are upside-down on your mortgage (meaning you owe more than your home is worth).
Can You Keep Your Vehicle and Other Assets?
Many people are also concerned about cars and other motor vehicles. Arizona residents may keep one vehicle if it has less than $5000 of equity in it ($10,000 you are handicapped). Again, you must keep making your car payments to avoid repossession. Two automobile exemptions are available for married couples filing together.
There are many other types of assets that are fully or partially exempt from liquidation, including retirement accounts, household furnishings, clothing, watches and wedding rings. To learn more, you can view the complete list of Arizona exemptions.
We will formulate a plan so that you can take advantage of 100 percent of your exemptions. We may also advise you on ways to handle non-exempt property so that you and your family get the benefit of the non-exempt property rather than the trustee. Contact us to discuss your options with a knowledgeable attorney.
