In Arizona, you can apply for both Chapter 7 and Chapter 13 Bankruptcy as an individual consumer.
Bankruptcy in Arizona does not discharge some debts, including most back taxes, child support, alimony, most student loans, penalties or fines, and purchases greater than $550 made within 90 days of filing bankruptcy, or cash advances greater than $825 made within 70 days of filing bankruptcy.
To file for Chapter 7 bankruptcy in Arizona and have your debts erased, you must pass a means test. Under the test, if you make less than the median income for an Arizona family, you may file under Chapter 7. For singles, the median income in Arizona is $40,945. $53,153 is the median income for a family of two, $59,782 for three persons, and $66,903 for four persons. If there are more than four members of your family, add $6,900 for each additional person.
Before you file Chapter 7 bankruptcy in Arizona you will need to undergo credit counseling approved by the state, as well as complete any unfiled tax returns.
Once you meet the minimum requirements, your attorney will need to file a Statement of Financial Affairs with your local Court. Your Statement of Financial Affairs will include a list of all your debts, both secured (such as mortgages or car loans) and unsecured (such as credit cards and medical bills). You will also need to include names and contact information for all your creditors and an itemized list of your personal property and assets.
If you own a home and file bankruptcy in Arizona, you will be able to keep it under the homestead exemption if you have less than $150,000 in equity in it.
Under Arizona law, you may also take up to $5,000 in exemptions for your vehicle in your bankruptcy. If you are disabled, you are entitled to $10,000 in motor vehicle exemptions. If you have an auto loan, you will need to reaffirm it after filing bankruptcy.
Pursuant to Arizona bankruptcy law, you can also keep the following: Furniture and household appliances, up to $4,000; clothing, up to $500; books, up to $250; guns and tools, up to $500; wedding and engagement rings, up to $1,000; pets and livestock, up to $500; and one watch, up to $500. You may also keep your retirement plan and some life insurance proceeds under Arizona law.
If you have extra income that would allow you to repay your debts, you may want to file Chapter 13 bankruptcy. Under Arizona Chapter 13 bankruptcy, you will establish a payment plan with the approval of the court.