Updated December 13, 2018
In bankruptcy, a homestead exemption protects equity in your home. In this article, you’ll find specific information about keeping residential property using the homestead exemption in Arizona.
For more information about filing for bankruptcy in Arizona, including other property you can protect with exemptions, read Filing for Bankruptcy in Arizona Without a Lawyer.
Under the Arizona exemption system, homeowners can exempt up to $150,000 of equity in their home or other property covered by the state’s homestead exemption. Learn what will happen to property you can’t protect with an exemption.
Arizona is not a state that will allow a married couple to double the homestead exemption amount. In Arizona, it doesn’t matter whether a single person or married couple claims an exemption on a homestead—the property will be exempt only up to the $150,000 maximum homestead amount.
Under the Arizona homestead exemption law, the following are exempt (up to $150,000 in equity):
In each of the above instances, the dwelling (house, condominium, cooperative, or mobile home) must be your residence— that is, you must 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.
In Arizona the homestead exemption is automatic – you don’t have to file a homestead declaration 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 might require you to designate to which property the exemption applies.
One exception to the Arizona homestead exemption worth noting is that it doesn’t 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.
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. Find out more about bankruptcy exemptions by reading Bankruptcy Exemptions: An Overview.
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.