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ARIZONA LEGISLATURE AMENDS EXEMPTIONS FOR BANKRUPTCY

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For the first time since 2001, Arizona has increased the exemptions that a Debtor may claim when he files a bankruptcy. When debtors file a Chapter 7 bankruptcy, they receive a discharge of their debts (with some limited exceptions). In exchange for this discharge, a trustee is appointed who takes and sells some of the debtor’s property to be used to pay his creditors. However, pursuant to the Arizona exemptions, there are some items the trustee cannot take. The debtor gets to keep these items to help with her fresh start. Beginning September 15, 2013, the new exemption law allows exemptions in more items of property and for increased values. Some of the highlight are as follows: [NOTE: Regarding a debtor’s home-This was unchanged. A debtor can still exempt equity of $150,000].

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1. All wearing apparel not in excess of a fair market value of five hundred dollars ($500).

2. All musical instruments provided for the debtor’s individual or family use not in excess of an aggregate fair market value of four hundred dollars ($400).

3. Domestic pets, horses, milk cows and poultry not in excess of an aggregate fair market value of eight hundred dollars ($800).

4. All engagement and wedding rings not in excess of an aggregate fair market value of two thousand dollars ($2,000).

5. The library of a debtor, including books, manuals, published materials and personal documents not in excess of an aggregate fair market value of two hundred fifty dollars ($250).

6. One watch not in excess of a fair market value of one hundred fifty dollars ($150).

7. One typewriter, one computer, one bicycle, one sewing machine, a family bible, a lot in any burial ground, one shotgun or one rifle or one pistol, not in excess of an aggregate fair market value of one thousand dollars ($1,000).

8. Equity in one motor vehicle not in excess of a fair market value of six thousand dollars ($6,000). If the debtor or debtor’s dependent is physically disabled, the equity in the motor vehicle shall not exceed twelve thousand dollars ($12,000).

9. Professionally prescribed prostheses for the debtor or a dependent of the debtor, including a wheelchair.

10. A total of three hundred dollars ($300) held in a single account in any one financial institution.

Perhaps the most important change concerns self employed business debtors who can now exempt the tools, equipment, instruments and books, including telephone numbers, client or customer contact information, or marketing tools, such as websites, domain names or any other intangible work product, in the possession of a debtor or the spouse of a debtor primarily used in, and necessary to carry on or develop, the commercial activity, trade, business or profession of the debtor or the debtor’s spouse, not in excess of an aggregate fair market value of five thousand dollars ($5,000). For the purpose of this paragraph, “tools” do not include a motor vehicle primarily used by a debtor for personal, family or household purposes such as transportation to and from the debtor’s place of employment.