Arizona Bankruptcy Guide

Complete guide to filing bankruptcy in Arizona, including current median income requirements, Arizona's exceptionally generous homestead exemption up to $250,000, bankruptcy court information, and how to find qualified bankruptcy attorneys throughout Arizona.

Arizona Median Income for Bankruptcy (2026)

To qualify for Chapter 7 bankruptcy in Arizona, your household income must be below these median income levels. If your income exceeds these amounts, you may still qualify through the means test or need to file Chapter 13 instead.

Household Size	Annual Median Income	Monthly Median Income
1 person	$62,087	$5,174
2 people	$75,358	$6,280
3 people	$79,843	$6,654
4 people	$88,293	$7,358
5 people	$97,293	$8,108
6 people	$106,293	$8,858

Note: For households larger than 4, add $9,000 per additional person. These figures are updated annually by the U.S. Trustee Program.

Calculate Your Arizona Eligibility

Arizona Bankruptcy Exemptions

Arizona does not allow bankruptcy filers to choose federal exemptions. All Arizona bankruptcy filers must use Arizona state exemptions. However, Arizona has some of the most generous exemptions in the United States, particularly its $250,000 homestead exemption.

Arizona Homestead Exemption

Up to $250,000.

Arizona's homestead exemption protects up to $250,000 of equity in your primary residence. This is one of the highest specific homestead exemptions in the nation (second only to states with unlimited homesteads like Texas and Florida). The exemption was substantially increased in recent years to provide better protection for Arizona homeowners.

The exemption applies to real property including houses, condominiums, mobile homes, and co-ops that serve as your principal residence. The property must be your principal residence at the time of filing bankruptcy.

With Arizona's rapidly appreciating real estate markets in Phoenix, Scottsdale, Tucson, and other metropolitan areas, this generous homestead exemption allows most Arizona homeowners to protect their homes entirely in Chapter 7 bankruptcy.

Arizona Vehicle Exemption

Up to $6,000 (or $12,000 if disabled).

Arizona allows you to protect up to $6,000 of equity in one motor vehicle. If you are disabled (as defined by the Social Security Administration), the vehicle exemption increases to $12,000. This is one of the more generous vehicle exemptions in the country.

If you owe more than your vehicle is worth or have equity within this limit, you can typically keep it by continuing to make loan payments through a reaffirmation agreement in Chapter 7 or through your payment plan in Chapter 13.

Arizona State Exemptions

Arizona bankruptcy exemptions include:

• Homestead: $250,000
• Vehicle: $6,000 ($12,000 if disabled)
• Household Goods and Furnishings: $6,000
• Clothing: $500
• Wedding and Engagement Rings: $2,000
• Watch: $150
• Pets: $500
• Bicycle: $500
• Bible: Unlimited
• Burial Plot: $10,000
• Musical Instruments: $400
• Tools of Trade: $5,000
• Bank Deposits: $300 in any bank accounts
• Wildcard: None (no general wildcard exemption in Arizona)
• Wages: 75% of earned wages (or 30 times the federal minimum wage per week, whichever is greater)

Other Protected Assets

• Retirement Accounts: Fully protected including 401(k), IRA, pension plans, and government retirement benefits under federal law
• Public Benefits: Social Security, unemployment, workers' compensation, veteran's benefits, disability benefits, welfare, TANF
• Life Insurance: Cash surrender value up to $10,000 if beneficiary is spouse, child, or dependent; group life insurance proceeds
• Health Aids: Prostheses, wheelchair, and other prescribed health aids
• Education Savings: Arizona 529 education savings plan contributions
• Prepaid Rent: Prepaid rent or security deposit for residence, up to $2,000
• Personal Injury Awards: Awards for personal injury (except for pain and suffering)
• Wrongful Death Awards: Wrongful death recoveries needed for support

Filing Bankruptcy in Arizona

Chapter 7 Bankruptcy in Arizona

Chapter 7 bankruptcy is very commonly filed throughout Arizona. The process typically takes 3-4 months from filing to discharge and eliminates most unsecured debts including credit cards, medical bills, personal loans, and past-due utility bills.

To qualify for Chapter 7 in Arizona, you must pass the means test by having income below the Arizona median or by showing that after allowable expense deductions, you lack sufficient disposable income to fund a Chapter 13 repayment plan. You must also complete credit counseling from an approved agency within 180 days before filing.

Arizona's exceptionally generous exemptions, especially the $250,000 homestead exemption, mean that most Arizona residents can keep all their assets while obtaining a complete discharge of unsecured debts through Chapter 7. Even in expensive areas like Scottsdale or Paradise Valley, many homeowners are fully protected.

Learn more about Chapter 7 bankruptcy →

Chapter 13 Bankruptcy in Arizona

Chapter 13 bankruptcy allows Arizona residents to keep property while repaying some or all debts through a court-approved 3-5 year payment plan. This option is particularly beneficial if you're behind on mortgage or car payments and want to catch up while stopping foreclosure or repossession.

Chapter 13 is especially useful in Arizona if your income is too high to qualify for Chapter 7, if you have non-exempt assets you want to protect (rare with Arizona's generous exemptions, but possible if you have more than $250,000 in home equity), or if you have priority debts like recent taxes or past-due child support. Your monthly payment is based on your disposable income after allowable living expenses.

Learn more about Chapter 13 bankruptcy →

Bankruptcy Court in Arizona

Arizona has one federal bankruptcy court district:

District of Arizona

Main Courthouses: Phoenix, Tucson, Yuma

The U.S. Bankruptcy Court for the District of Arizona covers the entire state. The court has three divisions corresponding to Arizona's main geographic regions:

Phoenix Division (Central Arizona): Serves Maricopa County and surrounding areas including Phoenix, Scottsdale, Mesa, Tempe, Glendale, Chandler, Gilbert, and the entire Phoenix metropolitan area. This is by far the busiest division, handling the majority of Arizona bankruptcy cases due to the Phoenix metro area's population.

Tucson Division (Southern Arizona): Serves Pima County and southern Arizona including Tucson, Sierra Vista, Nogales, and the surrounding region. This division handles cases from southern Arizona.

Yuma Division (Western Arizona): Serves Yuma County and western Arizona. This is the smallest division by case volume.

You must file in the district where you have lived for the greater part of the 180 days before filing. Since Arizona has only one district, all Arizona residents file in the District of Arizona, but your case will be assigned to the appropriate division based on your county of residence.

Arizona Residency Requirements

To use Arizona bankruptcy exemptions, you must have been domiciled (legally residing) in Arizona for at least 730 days (2 years) before filing. If you've lived in Arizona for less than 2 years, you must use the exemptions from the state where you lived for the 180 days immediately before the 2-year period.

Arizona does not allow the choice of federal exemptions, so once you meet the residency requirement, you must use Arizona state exemptions (which are very generous).

Find an Arizona Bankruptcy Attorney

Most Arizona bankruptcy attorneys offer free initial consultations. Given the complexity of bankruptcy law and the benefits of Arizona's generous exemptions, consulting with an experienced Arizona bankruptcy attorney is highly recommended.

What an Arizona Bankruptcy Attorney Can Do

• Determine which bankruptcy chapter is right for your financial situation
• Maximize Arizona exemptions to protect your assets
• Evaluate whether your home equity is protected under Arizona's $250,000 homestead
• Calculate whether you qualify for Chapter 7 using the Arizona means test
• Navigate Arizona-specific bankruptcy procedures and local court rules
• Complete and file all required bankruptcy paperwork correctly
• Represent you at the 341 meeting of creditors
• Handle any objections from creditors or the bankruptcy trustee
• Guide you through the entire process from filing to discharge

Cost of Filing Bankruptcy in Arizona

Chapter 7 bankruptcy attorney fees in Arizona vary by location:

• Phoenix metro area (Scottsdale, Mesa, Tempe, Chandler): $1,200 to $1,800 plus $338 filing fee
• Tucson area: $1,000 to $1,500 plus $338 filing fee
• Yuma, Flagstaff, Prescott: $900 to $1,400 plus $338 filing fee
• Other Arizona cities and rural areas: $800 to $1,300 plus $338 filing fee

Chapter 13 attorney fees typically range from $3,000 to $4,500 plus a $313 filing fee. In Chapter 13, attorney fees are usually paid through your repayment plan rather than upfront.

Many Arizona attorneys offer payment plans for Chapter 7 to make bankruptcy more accessible.

Arizona-Specific Bankruptcy FAQs

Can I keep my house in Arizona bankruptcy?

Almost certainly yes. Arizona's $250,000 homestead exemption is one of the most generous in the nation. If you have $250,000 or less in equity in your primary residence, your home is fully protected in Chapter 7 bankruptcy. Given that most homeowners have mortgages, the vast majority of Arizona homeowners fall well within this limit and can keep their homes while discharging unsecured debts.

Can I keep my car in Arizona bankruptcy?

Yes, in most cases. Arizona allows you to exempt up to $6,000 of equity in one motor vehicle ($12,000 if you're disabled). Most Arizona residents with auto loans have equity below these amounts. If you owe more than your car is worth or have equity within this limit, you can typically keep it by continuing to make payments through a reaffirmation agreement.

Does Arizona allow federal bankruptcy exemptions?

No, Arizona is one of the states that opted out of the federal exemption system. All Arizona filers must use Arizona state exemptions. However, this is rarely a disadvantage because Arizona's state exemptions are far more generous than federal exemptions, especially the $250,000 homestead compared to the federal $27,900 homestead.

How does Arizona's community property law affect bankruptcy?

Arizona is a community property state, meaning most assets and debts acquired during marriage are owned equally by both spouses. In bankruptcy, this means: (1) community debts incurred during marriage may be discharged even if only one spouse files, (2) community property may be part of the bankruptcy estate, (3) both spouses' income may be considered for means test purposes even if only one files. An Arizona bankruptcy attorney can help navigate these community property issues.

What if I recently moved to Arizona from another state?

If you've lived in Arizona for less than 730 days (2 years), you must use the exemptions from your previous state of residence. This could significantly impact your case, especially if your previous state had lower exemptions. For example, if you moved from a state with a $25,000 homestead exemption, you'd have to use that instead of Arizona's $250,000 exemption until you've been in Arizona for 2 years. Plan your bankruptcy timing carefully with an attorney.

Can I file bankruptcy if I own rental property in Arizona?

Yes, but rental properties don't qualify for the homestead exemption since they're not your primary residence. If you have significant equity in rental property, it may be considered a non-exempt asset in Chapter 7, which could require Chapter 13 instead. However, if the rental property has little or no equity (or has a mortgage exceeding its value), it won't affect your bankruptcy. Consult an Arizona bankruptcy attorney to evaluate your specific situation.

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