Filing for bankruptcy can be a difficult decision, but often a necessary one. As an experienced bankruptcy law firm in Scottsdale, AZ, we understand the many concerns our clients have about protecting their assets during the bankruptcy process. When it comes to bankruptcy in Arizona, certain assets can be protected. In this article, we will discuss what these assets are and how you can protect them. So, what assets can you protect from bankruptcy in Arizona?
Homestead Exemption
One of the most important assets that people want to protect in bankruptcy is their home. Arizona has a Homestead Exemption that protects a certain amount of equity in a person’s principal residence from creditors. In Arizona, this amount is $150,000. This means that if the equity in your home is less than or equal to $150,000, you may be able to protect your home from creditors in a bankruptcy. However, if the equity in your home exceeds that amount, the trustee may sell the home to pay off your debts.
Retirement Plans
Another asset that can be protected in a bankruptcy is retirement plans. Arizona exempts most retirement plans from the bankruptcy estate. This means that 401(k)s, IRAs, and other qualified retirement plans are generally safe from creditors during a bankruptcy. There is no dollar amount limit on this exemption. However, there are some exceptions to this rule, so it is important to consult with a bankruptcy attorney to ensure your retirement plan is protected.
Vehicles
Arizona also has an exemption for motor vehicles. Under Arizona law, up to $6,000 of equity in one motor vehicle can be protected. If multiple vehicles are owned by the filer, this exemption can be applied to only one vehicle, but there is another exemption of up to $6,000 in personal property that can be used to protect equity in additional vehicles or other personal property.
Tools of the Trade
If you use tools or equipment for your job, these items may be exempt from bankruptcy as well. Arizona protects up to $5,000 worth of tools or equipment that are necessary to your profession. This exemption includes all kinds of work tools, including computers and office equipment. If your tools of the trade exceed $5,000, you may be able to use the $6,000 exemption in personal property to protect the additional equity.
Wildcard Exemption
Finally, there is a wildcard exemption in Arizona that can be used to protect any property of your choosing. This exemption can be used to protect property that does not fit into the other categories of exemptions, or to supplement the amount of protection provided by another exemption. This exemption is generally limited to $5,000 in value.
What Assets Can You Protect From Bankruptcy in Arizona?
We hope this article has been informative and helpful in understanding the assets that can be protected in a bankruptcy in Scottsdale, Arizona. When considering bankruptcy, it is important to work with an experienced attorney who can help guide you through the process and protect as many of your assets as possible. At the Law Office of Thomas Law, we are dedicated to helping our clients navigate bankruptcy with as little stress as possible. Contact us today for a free consultation to discuss your bankruptcy options.
