In bankruptcy, a homestead exemption protects equity in your home. Here you’ll find specific information about the homestead exemption in Arizona.
For information about how the homestead exemption works in both Chapter 7 and Chapter 13 bankruptcy, see The Homestead Exemption in Bankruptcy. For more articles on exemptions, see our Bankruptcy Exemptions area.
Under the Arizona exemption system, homeowners may exempt up to $150,000 of their home or other property covered by the state’s homestead exemption.
While many states allow for a doubling of the homestead exemption amount for married couples, Arizona does not. In Arizona it does not matter whether a single person or married couple claims that a homestead is exempt property—the property will only be exempt up to the $150,000 cap.
Under the Arizona homestead exemption law, the following (up to $150,000 in value) are exempt:
In each of the above instances, the dwelling (house, condominium, cooperative, or mobile home) must be your “residence”— that is, you (or you and your spouse) must actually live in the dwelling.
The homestead exemption also applies to cash proceeds from the sale of a homestead property. These proceeds remain exempt for 18 months from the sale of the property, or until the proceeds are used to purchase a new homestead, whichever time is shorter.
Some states allow bankruptcy filers to use the federal bankruptcy exemptions instead of the state exemptions. Arizona is not one of those states. If you reside in Arizona, then you must use the state exemptions.
(To learn more about which state exemptions apply to you, see Which Exemptions Can You Use in Bankruptcy?)
In Arizona the homestead exemption is automatic – you don’t have to file a homestead declaration in order to claim the homestead exemption in bankruptcy. However, if you have more than one property to which the homestead exemption could reasonably apply, a creditor may require you to designate to which property the exemption applies.
One exception to the Arizona homestead exemption worth noting is that it does not exempt property from liens for child or spousal support arrearages. In Arizona, if the court has reduced a child or spousal support arrearage to a judgment, then the homestead exemption will not apply to that judgment and the homestead may be subject to a forced sale to satisfy that judgment.
Arizona’s homestead exemption is found in the Arizona Revised Statutes at Title 33, Chapter 8, sections 1101-1153 (33 A.R.S. § § 1101 et seq.). To learn how to find state statutes, check out Nolo’s Laws and Legal Research area. The Arizona Revised Statutes can be found online at http://www.azleg.gov/ArizonaRevisedStatutes.asp.