What are the exemptions in Arizona, and what can I keep if I file bankruptcy?
Each state chooses exemptions that apply in filing bankruptcy, and can either choose to allow use of the federal exemptions, or not. In Arizona the federal exemptions are NOT available, a debtor must use the state exemptions.
In Arizona, the list of exemptions state the items that a creditor cannot take when enforcing a debt obligation. These exemptions apply whether or not someone files for bankruptcy and to know more about the process it is advised to consult estate planning lawyers who will educate you more about the process. One reason that many people choose and needs help with filing for bankruptcy (besides the harassment they receive from creditors) is that wages only have a 75% exemption, meaning that once a creditor has a judgement they can take 25% of a paycheck on an ongoing basis, until the debt is paid in full with all of the interest, late fees, attorney fees, penalties and such.
When a Chapter 7 (liquidation) bankruptcy is filed, all of the assets of the person filing bankruptcy (also referred to as “debtor” or “petitioner”) are temporarily transferred into the control of a trustee, under a trust. The trustee’s job is to distribute the assets, or in other words figure out who gets what. In about 90% of the cases creditors get nothing and the debtor keeps all of the assets because they are all covered by exemptions. In the 10% or so of cases where the trustee determines that there are assets that are not covered by the exemptions, those assets are secured and sold by the trustee, and the money goes to the creditors after expenses are paid.
In bankruptcy you can keep anything that is covered by an exemption. For more information about your specific case please call and schedule an appointment with an experienced bankruptcy attorney at The Carroll Law Firm, PLC.
