“Exemptions” are a list the real and personal property that individuals may keep no matter what type of bankruptcy they are filing. Exemptions are governed by Arizona state law. If an individual has not lived in Arizona for 2 years prior to filing for bankruptcy, the amounts and exemptions may be governed by another state’s laws. An attorney can advise as to what exemptions would be available in a particular bankruptcy case.
Generally, for all states, individuals may keep (exempt) assets such as their residence, automobile, furnishings, clothing and tools of the trade up to a certain amount. For example, in Arizona individuals may exempt their residence from the bankruptcy if they have less than $350,000 in equity in the property as long as they remain current on their mortgage payments. In addition, in Arizona individuals may keep $1,000,000 in traditional and Roth IRAs and $12,000 in household furnishings. Individuals may also exempt one vehicle if they have less than $15,000 in equity on the vehicle after paying any lienholders. This does not mean that individuals may not keep an additional vehicle, but the second vehicle will not be exempt.