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    Chapter 7 Bankruptcy

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    Bankruptcy Laws in Arizona

    The state of Arizona has its own set of bankruptcy laws, exemptions, and processes, which can be different from those in other states. In this article, we will explore the unique nature of bankruptcy law in Arizona and what it means for those who are considering filing for bankruptcy.

    Chapter 7 Bankruptcy in Arizona

    Chapter 7 bankruptcy is the most common type of bankruptcy filed in Arizona. It is also known as a “liquidation” bankruptcy, as it involves the liquidation of a debtor’s assets to pay off their debts. Arizona has its own set of exemptions that determine which assets can be protected from liquidation. Examples of these exemptions include:

    Homestead Exemption

    The homestead exemption in Arizona allows debtors to protect up to $150,000 in equity in their primary residence. This exemption applies to both real property and mobile homes.

    Personal Property Exemptions 

    Arizona allows debtors to protect the personal property of up to $6,000. Personal property can include: 

    • $6,000 for household goods and furnishings
    • $6,000 for jewelry
    • $2,000 for tools of the trade
    • $2,000 for one motor vehicle
    • $500 for any one item of personal property
    • $500 for any accrued wages

    Retirement Accounts

    Retirement accounts, such as 401(k)s and IRAs, are protected from liquidation in an Arizona chapter 7 bankruptcy. There is no limit to the amount of retirement account funds that can be protected.

    These exemptions are different from those in other states, so it is important to work with an experienced bankruptcy attorney to determine which exemptions apply in your case.

    Median Income in Arizona

    The median income for a household of one person in Arizona is around $52,882 per year (as of April 2023). However, the specific median income amount for a household of a particular size and location within Arizona can vary. If the debtor’s income is higher than the applicable median income, further calculations are done to determine eligibility for Chapter 7 bankruptcy. It’s recommended to consult with a bankruptcy attorney for specific guidance on the means test and eligibility requirements.

    Chapter 13 Bankruptcy in Arizona

    Chapter 13 bankruptcy is a type of bankruptcy that involves the creation of a payment plan to pay off debts over a period of three to five years. Arizona has a high median income of $52,882 as of April 2023, which means that debtors who earn too much to qualify for Chapter 7 bankruptcy may still be eligible for Chapter 13 bankruptcy. Additionally, Arizona has high debt limits for Chapter 13 bankruptcy, which means that debtors with a high amount of debt may still be able to file for Chapter 13 bankruptcy.

    Wage Garnishment

    In Arizona, wage garnishment is limited to 25% of a debtor’s disposable earnings or the amount by which their disposable earnings exceed 30 times the federal minimum wage, whichever is less. This is similar to the federal limit of 25% or the amount by which disposable earnings exceed 30 times the federal minimum wage.

    Debt Collection

    Arizona has strict laws regarding debt collection. For example, debt collectors are not allowed to contact debtors before 8:00 a.m. or after 9:00 p.m. Debt collectors are also not allowed to contact debtors at their place of employment if they have been asked not to do so. Additionally, debt collectors are required to provide debtors with certain information, such as the amount of the debt and the name of the creditor, within five days of their initial contact.


    Arizona has some of the strongest foreclosure protections in the United States. In Arizona, lenders are required to contact borrowers to explore options to avoid foreclosure before starting the foreclosure process. Additionally, Arizona has a law that requires lenders to wait at least 90 days after a borrower has defaulted on their mortgage before starting the foreclosure process. This gives borrowers more time to catch up on their payments or explore other options to avoid foreclosure.


    Bankruptcy law in Arizona is unique from other states in more ways than one. Arizona has its own set of exemptions, debt limits, and foreclosure protections that can be different from those in other states. If you are considering bankruptcy in Arizona, it is recommended to consult with an experienced bankruptcy attorney to understand the unique laws and exemptions in the state.

    If you are considering bankruptcy and would like to speak to an attorney, then click here to use our free, no-obligation attorney matching service for a free consultation, or call (833) 598-1595.

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