Personal Property Exemptions
On April 23, 2013 Governor Brewer signed HB 2325, thereby amending the
personal property exemptions available to debtors within Arizona.
The Bankruptcy Code defines the types of property that an individual debtor in
bankruptcy may exempt and affords the debtor the choice of the exemptions listed
in the Bankruptcy Code itself or the exemptions available under other federal
law or under applicable state or local law, this is subject to an applicable
state law that specifically does not authorize the use of the federal
exemptions. Thus, states are given the option to enact their own exemption
schemes and forbid a debtor's election of the Bankruptcy Code exemptions.
The Bankruptcy Code provides an opportunity for individual state legislatures to
determine what items may be claimed as exempt by a bankruptcy debtor by doing
what is normally termed "opting out" of the Bankruptcy Code exemptions. A state
thus has, by its ability to opt out, a "veto" power over the federal bankruptcy
exemptions. If a state has "opted out" of the federal exemption scheme, debtors
who file in that state must claim exemptions pursuant to that state's laws, for
while federal law controls exemptions generally and exemption procedures, state
law governs specific property that may be exempted and the value of those
exemptions (11 U.S.C. § 522(b)(2)(A)). Arizona has opted out of the federal
A.R.S. § 331133(B).
Additionally, Rule 4003(a) of the Federal Rule of Bankruptcy Procedure sets
forth the requirement that the debtor file a list of his or her property claimed
as exempt. Rule 4003(b) allows a party in interest to file an objection to the
list of property claimed as exempt within thirty days after the meeting of
creditors or within 30 days after any amendment to the list of exempt property
is filed, whichever is later. Id. Under Rule 4003(c), in any hearing relating to
claims of exemptions, the objecting party has the burden of proving that the
exemptions are not properly claimed.
Removes the itemized list of household
furniture, furnishings and appliances that are exempt from process.
Raises the aggregate fair market value of exempted items to the following
Musical instruments: $250 to $400;
Domestic pets, horses, milk cows and
poultry: $500 to $800;
Engagement and wedding rings: $1,000 to
One watch: $100 to $150.
Expands the list of exempt miscellaneous items to include one computer and
raises the aggregate fair market value for that section from $500 to $1000.
Raises the aggregate fair market value of exempt vehicles to the following
amounts and specifies that the amount includes equity:
One vehicle: $5,000 to $6,000;
One vehicle, if debtor is physically
disabled: $10,000 to $12,000.
Raises the value of exempt monies in a bank account from $150 to $300.
Raises the monetary value of prepaid rent that may be claimed as a personal
property homestead from $1,000 to $2,000.
Expands the list of items exempt as tools and equipment of a trade to
include telephone numbers or any other client contact information, marketing
tools, such as a website, domain name or any other intangible work product
necessary to carry on or develop commercial activity or trade and raises the
monetary threshold from $2500 to $5000.
Makes technical and conforming changes.