Arizona Bankruptcy Exemptions Expanded by New Law
In September of 2013, House Bill 2325 took effect in Arizona which increased several of the bankruptcy exemptions. The Bill changed the following provisions:
A.R.S. § 33-1123 – Household furniture, furnishings and appliances
Under the old exemption, a debtor’s household property was only exempt to the extent that an item was included on a specified list set forth by statute (i.e. one couch, one television, three living room lamps). Further, a debtor’s household property was exempt, as delineated by statute, only to an aggregate value of $4,000. The new exemption expands household property items to include consumer electronic devices and households appliances used by dependent of the debtor as well as a general exemption of all household furniture, furnishings, goods, and appliances not exceeding an aggregate value of $6,000. Therefore, the debtor’s household goods are no longer subject to a statutorily prescribed list, rather, their household furniture and furnishings, goods, consumer electronic devices, and dependent’s household appliances will generally be exempt pending their aggregate value not exceeding $6,000. A.R.S. § 33-1125(7) – Personal Property Addition
The old exemption only exempted one typewriter, one bicycle, one sewing machine, a family bible, a burial plot, and one shotgun or one rifle or one pistol collectively aggregating a total fair market value of no greater than $500. The new exemption not only increases the aggregate fair market value exemption limit to $1,000 but also now includes one computer as a personal item that may now be included as exempt.
Under the old exemption, the equity in a debtor’s vehicle was exemption so long as it did not exceed $5,000. (Equity is the fair market value of the vehicle remaining after subtracting the debt owed to the secured lien holder.) The new exemption increases this exemption to exempt the equity in a debtor’s vehicle up to $6,000. Further, the exemption now provides that the vehicle may belong to the debtor or the debtor’s dependent. Additionally, the exemption also increased the equity exemption prescribed for debtors who are physically disabled; the fair market value of the vehicle is now exempt up to $12,000 as opposed to the previous amount of $10,000.
Increasing Exemption Limits
As of September 2013, a variety of exemptions increased in dollar amount. These items included:
Under the new law, the fair market value amount of this exemption increased from $200 to $400.
Domestic Pets, Horses, Milks Cows, and Poultry
Under the new law, the fair market value amount of this exemption increased from $500 to $800.
Engagement and Wedding Rings
Under the new law, the fair market value amount of this exemption increased from $1,000 to $2,000.
Under the new law, the fair market value amount of this exemption increased from $100 to $150.
A debtor was previously allowed to exempt one bank account up to the amount of $150. Under the new exemption, a debtor may now exempt one bank account up to $300.
Tools and Equipment
A debtor may exempt tools and equipment used in commercial activity, trade, business or their profession. These items aggregate fair market value, under the old exemption, was exempt up to $2,500. The new exemption increases the exemption amount to $5,000. However, it is important to note that a vehicle that is primarily used for personal, family, or household purposes (including transportation to debtor’s employment) shall not qualify under this exemption. Additionally, the exemption expanded to include telephone numbers, client or customer contact information, marketing tools, and other intangibles as tools and equipment under this statute and therefore exempt.