Possessions Lost in a Bankruptcy
It is counter intuitive, but you get to keep items which are exempt from the bankruptcy estate. Simultaneously with the filing of a bankruptcy all of your non-exempt property is no longer yours, but rather the property of the bankruptcy estate. Everything other than that listed in the exemption statutes is the property of your creditors who share in the property compiled within the bankruptcy estate. This would even include contingent recoveries for active litigation such as monies you are expecting to receive from a personal injury settlement.
Exempt Possessions when Filing for Bankruptcy
If you have lived in Arizona for less than two years you will use the exemption statutes available from the State in which you moved from. As long as you have lived in Arizona for more than 180 days jurisdiction is proper for your bankruptcy to be filed in Arizona. If eligible as indicated above, in Arizona you are allowed to keep the following:
- 33-1101 - Up to $150,000. Includes apartments and mobile homes; and sale proceeds up to 18 months after sale, or new home purchased, whichever occurs first. Husband and wife may not double. May record homestead declaration. §33-1102.
- 12-592 - Wrongful death awards.
- 32-1391.05 - Funeral deposits up to $5,000.
- 33-1123 - Household furniture and appliances not covered by other exemptions, up to 6,000 total.
- 33-1124 - Food and fuel for 6 months.
- 33-1125 - Motor vehicle up to $6,000 (or $12,000 if disabled); clothing to $500; pets, horses, milk cows and poultry to $800; books to $250; wedding and engagement rings to $2,000; musical instruments to $400; watch to $150; health aids; and up to $1,000 total for bicycle, sewing machine, typewriter, computer,burial plot, firearm, and bible.
- 33-1126 - Proceeds for sold or damaged exempt property; prepaid rent or security deposit to lesser of $2,000 or 1.5 times rent (only if not claiming homestead); bank deposit to $300 in one account.
- 33-1131 - 75% of earned but unpaid net wages or 30 times the federal minimum hourly wage.
- 50% of wages for support orders. Judge may allow more for low-income debtors.
- 11 U.S.C. § 522 - Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans).
- 11 U.S.C. § 522(b)(3)(C)(n) - IRAS and Roth IRAs to $1,245,475. (This amount is set by federal law. See Federal Bankruptcy Exemptions for updates on this dollar amount.)
- 9-931 - Police officers.
- 9-968 - Firefighters.
- 15-1628 - Members of board of regents as well as administrative officers and faculty under the board's jurisdiction.
- 33-1126 - ERISA-qualified benefits, if deposited more than 120 days before filing. IRAs & Roth IRAs.
- 38-762 - Retirement and disability of state employees.
- 41-955 - Rangers.
- 48-227 - District employees.
- 38-850(c) - Public Safety Personnel Retirement System.
- 23-783 - Unemployment compensation.
- 23-1068 - Workers' compensation.
- 46-208 - Welfare benefits.
- 33-1127 - Teaching aids of a teacher.
- 33-1130 - Tools, equipment and books up to $5,000; Farm machinery, utensils, instruments of husbandry, feed, seed, grain and animals up to a total value of $2,500; and arms, uniforms and equipment you are required by law to keep. (Subject to doubling)
- 20-877 - Fraternal benefit society benefits.
- 20-1131 - Life insurance proceeds if you have owned it at least 2 years and the beneficiary is a spouse or child.
- 20-1132 - Group life insurance policy or proceeds.
- 33-1126 - Life insurance proceeds if beneficiary is spouse or child, up to $20,000. Disability, accident or health benefits. Proceeds or cash value of life insurance or annuity contract if the beneficiary is a dependent member of the family and the contract has been owned longer than 2 years.
- 33-1126 - Alimony or child support. Minor child's earnings if debt is not for child.