Filing Bankruptcy In Arizona

Related Ads

Filing for all types of bankruptcy, other than Chapter 7 bankruptcy, is more or less the same from state to state. Chapter 7 bankruptcies can differ greatly from state to state regarding the applicable income figures in the initial means test and the exemptions allowed.  In Arizona, debtors follow the regulations of the state regarding exemptions, rather than the uniform federal code, but also, adhere to an augmentative federal supplement exemptions list.  Bankruptcy is a difficult decision no matter what. There are so many complexities and a finance to take into account it is hard to know whether it is the right decision. There are about as many positives as there are negatives to Bankruptcy in Arizona. The decision depends on the individual circumstances. Credit cards and mortgages are out of the question for years after filing. However, after filing one is free from creditors’ attempts to regain their money. One must go through the months of meetings and court dates with bankruptcy, but in the end, the process can get them back to financial freedom.

Arizona Bankruptcy Topics

  1. Personal Bankruptcy Options
  2. Keep Your Home: Bankruptcy and Foreclosure
  3. Arizona Exemptions to Bankruptcy Liquidation
  4. Options for Filing Bankruptcy
  5. Arizona Bankruptcy Courts and Trustees

Personal Bankruptcy in Arizona

 In Arizona, individuals will typically only file under Chapter 7 or Chapter 13 of Title 11 of the Federal Code.

Chapter 7 Bankruptcy

One of the two choices for individual bankruptcy in Arizona is Chapter 7 bankruptcy. It is commonly referred to as ‘liquidation’ or ‘fresh start’ bankruptcy. The first of those names is very accurate in that a bankruptcy trustee takes control of one’s assets to liquidate them to pay back the creditors involved. However, a ‘fresh start’ is misleading. There are a few debts that one cannot discharge automatically without repayment, such as child support, back taxes, criminal and civil judgments, alimony arrangements, and federally backed loan obligations, such as student loans. In Arizona, this list of non-dischargeable debts to stay with the debtor may now include recent purchases of more than $550, government fines, and any cash advances.

To qualify for Chapter 7 bankruptcy anywhere in the U.S. individuals must pass a means test based on the median income levels of a given state and the respective debtor’s income. A means test is passed, in theory, if the total income is below the median incomes noted in the state of Arizona.  The median income for Arizona is $43,397 for single individuals, $57,620 for couples, $60,002 for three member households, $71,867 for four member homes, and $6,900 more for each additional member or dependant.

Chapter 13 Bankruptcy

 “Wage earner” bankruptcy is a common nickname for Chapter 13 bankruptcy. This is a very accurate name in that Chapter 13 bankruptcy is most effective for those who earn a stable wage. The purpose of chapter 13 bankruptcy is not to get rid of one’s debts, but to reorganize and repay them effectively. This is true for all states in the U.S. With the help of a bankruptcy trustee, the debtor will communicate with all of his creditors to construct a plan to pay back all the debts. This is helpful for those who wish to maintain control of all of their property. The common requirements of Chapter 13 bankruptcy include provisions such as:

  • Possession of no more than $1,010,650 in secured debt and $336,900 in unsecured debts
  • Entire reorganization must be completed over the course of 3 to 5 years
  • Extensions can be applied for and made, but must be approved by the bankruptcy court for due cause
  • Amendments can also sometimes be created, but must be approved by the bankruptcy court as well

See more on: Filing Chapter 13 in Arizona

Filing Bankruptcy during Foreclosure

When an individual files any form of bankruptcy whatsoever, creditors are forced by law to cease all activity in reclaiming their debts, during what is known as a “stay” period. In the case of a foreclosure, if the foreclosure was filed before individual filed for bankruptcy, their home may still be foreclosed on by the creditor. However, in most cases, if an individual files for bankruptcy, their home will stay in their possession until further notice from bankruptcy court proceedings.  Even in light of inevitable foreclosure, bankruptcy can still be the soundest option for overall financial repair.

Arizona Bankruptcy Exemptions

In the state of Arizona, individuals may only claim exemptions per the bankruptcy state laws, which are used in conjunction with the federal supplemental exemptions list.

Type of Asset(s)

Details on Applicable Exemption(s)


Real estate property or mobile homes up to $150,000, which remains the same for married couples.


Disability benefits, fraternal society benefits, insurance proceeds, and group medical benefits are all exempt.


Life insurance benefits from parent up to $20,000, if individual claiming exemptions is child or spouse.


Annuity benefits if owned two years prior and beneficiary is dependant or spouse.

Pension Benefits

Pension benefits of law enforcement officers, judges, firefighters, rangers, and other state servants are exempt.


Tax-exempt retirement accounts; traditional and Roth IRAs up to $1,095,000 per person are exempt in Alaska bankruptcy filings.

Public Benefits

Workers compensation benefits, welfare benefits, and unemployment benefits are exempt assets.


Seventy-five percent of earned but unpaid net wages or up to thirty times the federal minimum hourly wage.

Personal Property

A total of $4,000 worth of clothing, household items, appliances, and other family goods are exempt and subject to doubling in cases of couples.


Motor vehicles up to $5,000 with $10,000 allotted in the case of non-working vehicles, and various exemptions for specific items such as bike, watch, firearm, domestic farm animals, pets, and other miscellaneous items up to a specific dollar amount for each item.


Cost of food and fuel provisions for the next six months.

Arizona Bankruptcy Court Filing Options

Need Bankruptcy Advice?

  • Use a Bankruptcy Lawyer - Though it may prove costly, a bankruptcy lawyer will prove to be a necessity for most individuals. They provide more than simply legal advice. A bankruptcy lawyer will be present with the debtor to all court dates and meetings. With a bankruptcy lawyer, one can rest assured that they are moving through the process the correct way at all times.
  • Use a Filing Service - Using a filing service may be of great use for businesses or individuals at first thought, but the reality is not as favorable. Though filing services filing services take care of all paper work for the individual or business, they provide no actual legal advice of any kind. Mistakes however, may still be made, because the individual debtor is assessing their possessions, rather than a trained professional. This may cause problems with bankruptcy fraud liability.
  • File “Pro Se” - Often those filing bankruptcy are truly to the bottom of their financial outlets. When this is the case, filing Pro Se may be the only option. To file Pro Se is to file alone. The individual or business takes care of all paperwork assessments and communications on their own accord. This can be dangerous, because of the complexities of bankruptcy, but may be a necessity.  Rarely, unless a bankruptcy professional themselves, do these cases return the most favorable decision for the debtor.

Courts and Arizona Bankruptcy Trustee Information

Arizona Bankruptcy Court Main Office

United States Courthouse, Suite 101
230 North First Avenue
Phoenix, AZ 85003

Arizona Bankruptcy Court Tucson Divisional Office

United States Courthouse
38 South Scott Avenue
Tucson, AZ 85701-1704

Arizona Bankruptcy Court Yuma Divisional Office

325 West 19th Street
Suite D
Yuma, AZ 85364