Arizona bankruptcy laws combine federal procedure with a state-specific set of property exemptions. All cases are filed in the U.S. Bankruptcy Court for the District of Arizona, which has offices in Phoenix, Tucson, and Yuma, plus hearing locations in Flagstaff and Bullhead City.1United States Bankruptcy Court. United States Bankruptcy Court for the District of Arizona What makes Arizona different from many states is that you cannot use the federal exemption list; you must rely entirely on Arizona’s own exemptions to protect your home, vehicle, retirement savings, and household belongings. Three things decide how bankruptcy will go for you here: whether you qualify for Chapter 7 or must use Chapter 13, how much of your property the state’s exemptions actually cover, and which of your debts the court will refuse to discharge.
Which Chapter You Can File
Chapter 7 wipes out most unsecured debt without a repayment plan, but you have to pass a means test first. The test averages your household income over the six months before filing and compares it to the median income for a household your size in Arizona.2Office of the Law Revision Counsel. 11 USC 707 – Dismissal of a Case or Conversion to a Case Under Chapter 11 or 13 Below median, you qualify automatically.
For cases filed on or after April 1, 2026, Arizona’s median income figures are:
- One earner: $73,935
- Household of two: $89,027
- Household of three: $104,965
- Household of four: $121,174
- Each additional person: add $11,100
These numbers are revised periodically.3United States Department of Justice. Census Bureau Median Family Income By Family Size
Above the median, the test moves to a second stage that subtracts standardized living expenses based on IRS and local standards from your income. If the disposable income left over is high enough to repay a meaningful share of your debt, the court presumes Chapter 7 is abusive and pushes you into Chapter 13.2Office of the Law Revision Counsel. 11 USC 707 – Dismissal of a Case or Conversion to a Case Under Chapter 11 or 13
Chapter 13 is a repayment plan, not a liquidation. You keep your property and pay creditors through a trustee over three or five years. Below-median households get the three-year plan; at or above the median, the commitment runs at least five years, with a shorter plan allowed only if unsecured creditors are paid in full earlier.4Office of the Law Revision Counsel. 11 USC 1325 – Confirmation of Plan Chapter 13 is also the usual choice for people behind on a mortgage or car loan who want to catch up through the plan instead of surrendering the collateral. Priority debts like recent taxes and child support must be paid in full; whatever disposable income remains goes to unsecured creditors.
What You Keep: Arizona Exemptions
Arizona is an opt-out state. Residents cannot choose the federal exemption set; state statutes are the only option.5Arizona Legislature. Arizona Revised Statutes 33-1133 – Other Exemption Laws In Chapter 7, exemptions decide what the trustee can sell. In Chapter 13, they shape how much you must pay unsecured creditors through the plan.
Your Home
The homestead exemption under ARS 33-1101 protects up to $400,000 of equity in your primary residence, whether that’s a house, condominium, cooperative, manufactured home, or other shelter where you actually live, plus the land underneath. One homestead applies per person or married couple, and a divorced couple claiming the same property is still capped at the combined $400,000.6Arizona Legislature. Arizona Revised Statutes 33-1101 – Homestead Exemptions, Persons Entitled to Hold Homesteads, Annual Adjustment
Your Vehicle
Under ARS 33-1125, you can protect up to $15,000 in equity in one motor vehicle, or $25,000 if you or a dependent has a physical disability. The cap is subject to annual cost-of-living adjustments.7Arizona Legislature. Arizona Revised Statutes 33-1125 – Personal Items
Personal Items
ARS 33-1125 also covers a detailed list of personal belongings at fair market value as of the filing date:
- Clothing up to $500
- Engagement and wedding rings up to $2,000
- Firearms up to $2,000
- Computer, bicycle, sewing machine, family bible, or burial plot up to $2,000 combined
- Musical instruments for personal or family use up to $400
- Books and personal documents up to $250
- One watch up to $250
- Prescribed prostheses and mobility devices, fully exempt
- Domestic animals and household pets, fully exempt
Household Goods
Furniture, electronics, and appliances get their own $15,000 combined fair-market-value exemption under ARS 33-1123.8Arizona Legislature. Arizona Revised Statutes 33-1123 – Household Furniture, Furnishings and Appliances, Annual Adjustment Because used furnishings resell for far less than purchase price, this cap covers a typical household’s contents in most cases.
Tools of Your Trade
Equipment you need to earn a living is protected up to $5,000 under ARS 33-1130, including tools, instruments, books, and intangible business assets like client lists, domain names, and websites.9Arizona Legislature. Arizona Revised Statutes 33-1130 – Tools and Equipment Used in a Commercial Activity, Trade, Business or Profession
Cash and Retirement
Under ARS 33-1126, you can protect $5,000 of cash in a single account at one financial institution, with annual cost-of-living adjustments that began in January 2024.10Arizona Legislature. Arizona Revised Statutes 33-1126 – Money Benefits or Proceeds, Exception Retirement accounts are much more generously protected. Employer-sponsored plans like 401(k)s, 403(b)s, and pensions, along with traditional IRAs, Roth IRAs, and government deferred compensation plans under IRC section 457, are fully exempt from creditor claims with no dollar cap. One catch: any amount contributed to an IRA within 120 days before filing is not protected.
Arizona does not offer a wildcard exemption. Property that doesn’t fit a specific category isn’t protected.
Debts That Survive the Case
Filing does not erase every debt. Federal law under 11 USC 523 keeps specific categories nondischargeable regardless of chapter.11Office of the Law Revision Counsel. 11 USC 523 – Exceptions to Discharge The main ones:
- Child support and alimony
- Most tax debts, including recent income taxes and taxes where the return was filed late or fraudulently
- Student loans, unless you prove “undue hardship” in a separate court proceeding by showing you cannot maintain a minimal standard of living while repaying, the hardship is likely to persist, and you made good-faith repayment efforts
- Debts from fraud, false pretenses, or misrepresentation
- Debts from willful and malicious injury to another person or their property
- Court-ordered restitution and criminal fines
- Government fines and forfeitures that aren’t compensation for actual losses
- Liability for death or personal injury caused by driving while intoxicated
Recent purchases are a trap for people filing on short notice. Consumer debts for non-essential goods totaling more than $900 within 90 days of filing are presumed fraudulent and nondischargeable, and cash advances over $1,250 within 70 days of filing carry the same presumption.12Federal Register. Adjustment of Certain Dollar Amounts Applicable to Bankruptcy Cases Creditors can challenge debts below those thresholds too; the amounts just set where the burden of proof lies.
Older income tax debts can sometimes be discharged if three timing tests all pass: the return was due at least three years before filing, actually filed at least two years before filing, and assessed by the IRS at least 240 days before filing. Fail any one and the tax stays.
The Automatic Stay
The moment the petition is filed, an automatic stay stops most collection activity: lawsuits, wage garnishments, collector calls, and foreclosure proceedings all halt.13Office of the Law Revision Counsel. 11 USC 362 – Automatic Stay Creditors who ignore it can be sanctioned. For someone facing an imminent garnishment or foreclosure sale date, that protection is often the most urgent reason to file.
The stay has limits. Criminal proceedings continue. So do most family law matters, including custody, visitation, domestic violence actions, paternity, and the establishment or modification of child support or alimony. Wage withholding for domestic support obligations also continues. If a prior bankruptcy was dismissed within the past year, the stay in a new case lasts only 30 days unless the court extends it. Two or more dismissals within the past year can eliminate the stay entirely.
How to File
Within 180 days before filing, you must complete a credit counseling session with an agency approved by the U.S. Trustee. The session can be done by phone or online, and a certificate must be filed with your petition; without it, the case is dismissed.14United States Department of Justice. Frequently Asked Questions – Credit Counseling
The filing itself centers on Official Form 101, the Voluntary Petition for Individuals Filing for Bankruptcy, along with schedules listing every asset, every creditor, your income, and your monthly expenses.15United States Courts. Voluntary Petition for Individuals Filing for Bankruptcy You must also give the trustee your most recent federal tax return or transcript at least seven days before the meeting of creditors, and may be asked to produce returns for the three preceding tax years.16Office of the Law Revision Counsel. 11 USC 521 – Debtor’s Duties Gather six months of pay stubs before you start on the forms, because the means test needs that detail.
Forms go to the clerk of the bankruptcy court, either in person at the Phoenix, Tucson, or Yuma offices or through the court’s Electronic Self-Representation system for certain submissions. The filing fee is $338 for Chapter 7 or $313 for Chapter 13, payable in installments if you cannot pay upfront. Chapter 7 filers below certain income thresholds can request a full fee waiver.17Legal Information Institute. Federal Rules of Bankruptcy Procedure Rule 1006 – Filing Fee Attorney fees are separate and run higher for Chapter 13 because the lawyer handles a multi-year plan.
About 30 to 45 days after filing, you attend the meeting of creditors (the 341 meeting). Creditors rarely appear; the trustee runs it and asks questions under oath about your petition, your assets, and your finances.18United States Department of Justice. Section 341 Meeting of Creditors This is where sloppy filings unravel. If bank statements don’t match your schedules, or a tax refund or inheritance is missing, the trustee will catch it. Honest omissions can usually be fixed by amending schedules; the problems start when the gaps look intentional.
Before discharge in either chapter, you have to complete a second class, the debtor education or personal financial management course, and file its certificate with the court.19Office of the Law Revision Counsel. 11 USC 1328 – Discharge Skip it and the case closes with no discharge.
A straightforward Chapter 7 discharge usually arrives four to six months after filing. Creditors have 60 days after the 341 meeting to object; if none do and the trustee’s review is complete, the discharge order follows.20Office of the Law Revision Counsel. 11 USC 727 – Discharge Chapter 13 discharges come only after the final payment on the three- or five-year plan and your certification that all domestic support obligations are current.
How Soon You Can File Again
Federal law caps how often you can get a bankruptcy discharge. The waiting periods run from the filing date of the earlier case to the filing date of the next:
- Chapter 7 after a prior Chapter 7 discharge: eight years
- Chapter 7 after a prior Chapter 13 discharge: six years
- Chapter 13 after a prior Chapter 7 discharge: four years
- Chapter 13 after a prior Chapter 13 discharge: two years
You can still open a case before the waiting period expires, but the court will deny the discharge.