If you file bankruptcy in Arizona, you must use the Arizona bankruptcy exemptions rather than the federal set, and those state rules let you keep up to $400,000 of equity in your home, $15,000 of equity in one vehicle, most retirement savings, a defined list of household goods and personal items, and most of your wages. Anything that falls outside those caps is exposed in a Chapter 7 case or raises the amount you must pay unsecured creditors in Chapter 13.
Who Can Use Arizona’s Exemptions
Arizona has opted out of the federal bankruptcy exemptions in 11 U.S.C. § 522(d), so filers in the state use Arizona’s amounts and no others.1Arizona Legislature. Arizona Code 33-1133 – Other Exemption Laws
There’s a residency test. You must have lived in Arizona for at least 730 consecutive days (roughly two years) before filing. If you moved more recently, the court looks back to wherever you lived for the majority of the 180 days before that two-year window, and you use that earlier state’s exemptions.2Office of the Law Revision Counsel. 11 U.S. Code 522 – Exemptions Recent transplants get caught by this often, so pin down your domicile timeline before you file.
Home Equity
The homestead exemption is the largest protection most filers use. You can shield up to $400,000 in equity in your primary residence, whether that’s a house, condominium, cooperative, mobile home, or a houseboat or travel trailer you actually live in.3Arizona Legislature. Arizona Code 33-1101 – Homestead Exemptions The number is equity, meaning value after outstanding mortgages and liens. One homestead per person or married couple.
Sell the home and the exemption follows the identifiable cash proceeds for eighteen months after the sale, or until you buy a new homestead, whichever comes first.3Arizona Legislature. Arizona Code 33-1101 – Homestead Exemptions
Federal Cap on Recently Purchased Homes
If you acquired the home within 1,215 days (about three years and four months) before filing, federal law caps the exempt equity at $214,000 in cases filed on or after April 1, 2025, regardless of what Arizona allows.2Office of the Law Revision Counsel. 11 U.S. Code 522 – Exemptions The state number still exists, but the federal ceiling overrides it when the house is that new. If you bought within the last few years, this is the figure that actually controls.
Vehicles
Arizona protects up to $15,000 of equity in one motor vehicle. If you or a dependent has a physical disability, the cap rises to $25,000.4Arizona Legislature. Arizona Code 33-1125 – Personal Items Because the cap covers equity, a $30,000 car with a $20,000 loan has only $10,000 in equity and sits well inside the limit.
These figures adjust annually for cost of living beginning January 1, 2024, rounded to the nearest $100. Adjustments have been modest so far, but check the current statutory number before you file.
Household Goods and Personal Items
Furniture, furnishings, appliances, and consumer electronics you personally use are exempt up to a combined fair market value of $15,000.5Arizona Legislature. Arizona Code 33-1123 – Household Furniture, Furnishings and Appliances Used furniture and appliances resell for little, so most filers keep everything in this category without a fight. This cap also adjusts each year.
Separate caps apply to specific personal items under a different statute:4Arizona Legislature. Arizona Code 33-1125 – Personal Items
- Clothing: up to $500 in fair market value
- Engagement and wedding rings: up to $2,000 combined
- One watch: up to $250
- Books and personal documents: up to $250
- Musical instruments for family use: up to $400
- Firearms: up to $2,000
- Computer, bicycle, sewing machine, or family bible: up to $2,000 combined
- Prostheses and prescribed mobility devices: fully exempt, no dollar cap
Arizona has no wildcard exemption. You cannot shift unused dollars from one category to cover something in another. Each asset must fit under its own cap or it’s exposed to the trustee.
Retirement Accounts and Insurance
Qualified retirement money has the broadest protection in Arizona. Balances in 401(a), 403(a), 403(b), traditional IRA, Roth IRA, and 457 deferred compensation plans are fully exempt with no state dollar limit.6Arizona Legislature. Arizona Code 33-1126 – Money Benefits or Proceeds
One trap to know: contributions made within 120 days before filing are not protected. Trustees watch for late deposits into retirement accounts because they’re an obvious way to shield money.6Arizona Legislature. Arizona Code 33-1126 – Money Benefits or Proceeds
For traditional and Roth IRAs (not employer-sponsored plans like 401(k)s), federal law sets its own ceiling. Under 11 U.S.C. § 522(n), IRA assets are protected up to $1,711,975 in cases filed on or after April 1, 2025.7Federal Register. Adjustment of Certain Dollar Amounts Applicable to Bankruptcy Cases This rarely bites most filers, but it controls if your IRA is large.
Life insurance proceeds payable to a surviving spouse or child are exempt up to $20,000. The cash surrender value of a policy you’ve owned continuously for at least two years is also exempt, provided the policy names a spouse, child, parent, sibling, or dependent family member as beneficiary. Pledge or assign that cash value as collateral, and the protection disappears.6Arizona Legislature. Arizona Code 33-1126 – Money Benefits or Proceeds Health, accident, and disability insurance benefits are protected under the same statute.
Wages and Support Payments
Arizona’s wage protection is more generous than the federal default. The most that can be garnished from your disposable weekly earnings is the lesser of 10 percent of those earnings, or the amount by which they exceed 60 times the highest applicable minimum wage (federal, state, or local).8Arizona Legislature. Arizona Code 33-1131 – Definition; Wages; Salary; Compensation Earn near minimum wage and almost nothing can be taken. The higher your income, the more the 10 percent cap does the work.
Child support and spousal maintenance you receive under a court order are fully exempt from creditor claims, with no dollar limit.6Arizona Legislature. Arizona Code 33-1126 – Money Benefits or Proceeds One important carve-out: the exemption does not protect assets from a judgment for child support arrearages you owe. Creditors holding that kind of judgment can reach property that would otherwise be shielded.
Tools of Trade and Provisions
If your income depends on specialized equipment, you can exempt up to $5,000 in tools, equipment, instruments, and professional books actually used in your trade or business, plus intangible work product like client lists, domain names, and business websites.9Arizona Legislature. Arizona Code 33-1130 – Tools and Equipment Used in a Commercial Activity, Trade, Business or Profession A motor vehicle used mainly for personal transportation is excluded here even if you drive it to work; that vehicle falls under the separate motor vehicle exemption. Farmers whose primary income comes from farming get a separate $2,500 exemption for farming equipment.
All food, fuel, and provisions kept for six months of individual or family use are exempt with no dollar cap.
What Happens to Property That Doesn’t Fit
In a Chapter 7 case, the trustee identifies any assets that exceed your exemption limits, sells them, and distributes the proceeds to creditors.10United States Courts. Chapter 7 – Bankruptcy Basics Most consumer Chapter 7 filings are “no-asset” cases because everything the debtor owns fits inside exemptions. A second vehicle, equity in a vacation property, or a taxable brokerage account is where trouble usually starts.
Chapter 13 works differently. You keep everything, but your repayment plan must pay unsecured creditors at least as much as they would have received in a Chapter 7 liquidation. Exemptions still set the floor: the more non-exempt property you have, the higher your required payments over the three-to-five-year plan.
Timing can matter at the margins. Arizona’s motor vehicle and household goods exemptions adjust annually with inflation, and the federal caps on recently acquired homestead equity and IRA balances reset every three years. If you’re close to a limit, a few weeks’ difference in the filing date can be the difference between keeping an asset and losing it.