personal bankruptcy attorneys Archives

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Written by Canterbury Law Group

9 July 2024

Federal and State Bankruptcy Exemptions

What are Bankruptcy Exemptions?

Bankruptcy exemptions are laws that allow debtors to protect certain property from being taken by creditors during the bankruptcy process. These exemptions help ensure that individuals can maintain a basic standard of living while resolving their debts. The specific exemptions available can vary by state, but they generally fall into two categories: federal exemptions and state exemptions.

Federal Bankruptcy Exemptions

The federal bankruptcy code provides a set of exemptions that apply in every state. Debtors can choose to use these exemptions instead of state exemptions if the state allows it. Some common federal exemptions include:

Homestead Exemption: Protects a certain amount of equity in the debtor’s primary residence. In 2024, the federal homestead exemption is $27,900.
Motor Vehicle Exemption: Protects up to $4,450 in equity in one motor vehicle.
Personal Property Exemptions: Protects specific amounts of equity in personal property, such as:
- Household goods and furnishings (up to $700 per item, with a total limit of $14,875).
- Jewelry (up to $1,875).
- Tools of the trade (up to $2,800).
Wildcard Exemption: Allows debtors to protect any property up to a certain amount. In 2024, the federal wildcard exemption is $1,475, plus up to $13,950 of any unused portion of the homestead exemption.
Retirement Accounts: Protects most tax-exempt retirement accounts, such as 401(k)s and IRAs, up to a certain limit (IRAs are capped at $1,512,350).
Public Benefits: Protects Social Security, unemployment, and disability benefits.
Life Insurance: Protects life insurance policies with a loan value up to $14,875.

State Bankruptcy Exemptions

Each state has its own set of bankruptcy exemptions, and some states allow debtors to choose between the state and federal exemptions. States that do not allow the use of federal exemptions require debtors to use state exemptions. Some examples of state exemptions include:

Homestead Exemption: Varies widely by state. Some states, like Florida and Texas, offer unlimited homestead exemptions, while others have specific dollar limits.
Motor Vehicle Exemption: Amounts vary by state. For example, California allows up to $3,325 in equity in one motor vehicle.
Personal Property Exemptions: Protect specific types and amounts of personal property, such as:
- Clothing, furniture, and appliances.
- Tools of the trade.
Wages: Many states protect a portion of the debtor’s wages from garnishment.
Retirement Accounts: Most states offer exemptions for retirement accounts similar to federal protections.
Public Benefits: Protects various public benefits, such as Social Security, unemployment, and disability benefits.
Wildcard Exemptions: Some states offer a wildcard exemption that can be applied to any property.

Choosing Exemptions

Debtors must choose either the federal or state exemptions, depending on their state of residence. In some cases, the choice of exemptions can significantly impact the outcome of the bankruptcy case. Consulting with a bankruptcy attorney can help debtors understand which set of exemptions is more beneficial for their situation.

Arizona Exemptions

At Canterbury Law Group, our Scottsdale attorneys are renowned bankruptcy technicians. We represent clients through the entire bankruptcy process and, although all cases are unique, the end goal of bankruptcy is always a new beginning and fresh financial start.

We help clients determine eligible exemptions for their bankruptcy case. Here are some of the most common exemptions available under Arizona law (meaning that they will emerge from bankruptcy):

Alimony and Child Support – Alimony and child support, up to the amount needed for support. 33-1126.
Bank Deposit – A debtor may exempt $300 in a single bank account. Ariz. Rev. Stat. Ann. § 33–1126(8).
Homestead or Residential Property – Under Arizona law, debtors may exempt up to $150,000 (per debtor or married couple) of their home or other real property covered by the homestead exemption. Ariz. Rev. Stat. Ann. §§ 33–1101, 33–1103 and 33–1104.
Insurance Benefits – Life insurance benefits that are payable or received by a surviving spouse or child, up to $20,000.
Claims for the destruction of, or damage to, exempt property – Cash surrender value of life insurance policies, subject to length of ownership requirements and other exceptions.
Motor Vehicles – A debtor may exempt up to $6,000 in one or more motor vehicles. An elderly or disabled debtor, or an elderly or disabled spouse or dependent of the debtor, may exempt up to $12,000.
Pension and Retirement Benefits – Benefits from various employee pension systems are exempt. Ariz. Rev. Stat. Ann. §§ 33–1126 and 38–792.
Personal Property – A debtor may exempt the following personal property:
- up to $6,000 in household furniture and appliances not covered by other exemptions
- up to $1,000 total in bible, bicycle, sewing machine, typewriter, computer, burial plot, rifle, pistol or shotgun
- up to $500 in clothing
- up to $400 in musical instruments
- up to $800 in animals
- up to $2,000 in engagement and wedding rings
- up to $250 in books
- up to $150 in watch
- wrongful death awards
- prepaid rent or security deposit to $2,000 or 1.5 times your rent, whichever is less, in lieu of using homestead exemption.
- all teaching materials for youth, and
- certain professionally prescribed health aids.

Tools of the Trade – A debtor may exempt up to $5,000 in trade implements, which includes farming tools if the debtor’s primary income is from farming. All arms and uniforms that a debtor is legally required to keep are exempt. Library and teaching aids of a teacher.
Unemployment Compensation – Unemployment compensation is exempt as long it is not commingled with other funds and except for the enforcement of child support orders. Ariz. Rev. Stat. Ann. § 23–783.
Wages – A debtor may exempt the lesser of the following wages, per week:
- 25% of his or her disposable earnings, or
- earnings in excess of 30 times the federal minimum wage
- Workers’ Compensation – A debtor may exempt up to $6,000 in one or more motor vehicles. An elderly or disabled debtor, or an elderly or disabled spouse or dependent of the debtor, may exempt up to $12,000.

Our legal team is ready to represent you in your Scottsdale business or personal bankruptcy case. Call us today to schedule your consultation. Our track record speaks for itself! 480-744-7711.

Regular Post

Written by Canterbury Law Group

5 September 2017

Bankruptcy Exemptions Allowed Under Arizona Law

Arizona bankruptcy law allows for a set of exemptions for assets when filing for personal bankruptcy under any chapter. Exemptions are property the debtor, that is you, can keep when you file for bankruptcy and are later discharged therefrom.

You can only exempt assets specified under the law. There are some debts that are non-dischargeable, or cannot be erased by a judge. Examples of non-dischargeable debt include income taxes owed, student loans, and child support and domestic support obligations. There are much more.

Exemptions apply to single persons or married couples filing for bankruptcy. Married couples who file jointly can claim typically claim all exemptions unless a judge specifies otherwise. Here is a list of notable exemptions under Arizona law:

Homestead—Real Property, like a home, where the debtor lives that is worth up to $150,000. Exemptions for sale last 18 months after or until a new property is purchased. A married couple cannot double the exemption up to $300,000 however.
Personal property like furniture, vehicles worth less than $6,000, family portraits, electronic gadgets, rugs, bank deposits up to $150, books, and so on that are worth up to $4,000. A married couple can double personal property exemptions.
Insurance proceedings such as group life insurance policies, fraternal benefit society proceeds, disability benefits, health insurance claims, and life insurance cash value up of total $25,000 (up to $1,000 per person, or $2,000 per dependent). A married couple can double life insurance value exemptions.
Earnings of a minor child.
Business or partnership property.
Various types of pensions, such as ERISA, 401ks, the board of regents members, IRAs, government worker pensions such as those for firefighters and state employees.
Public benefits received such as unemployment benefits, worker’s compensation, and welfare.
Value of tools of the trade such as arms, farm machinery, uniforms, teaching aids, and seeds, animal feeds, and so on.
Unearned wages for about 75 percent, payment pensions, and other forms of wage income.

The above is just a summary of exemptions. You can ask your bankruptcy attorney in Scottsdale for detailed clarifications. Some exemptions have value limits that you need to get clarified. Married couples can double on some exemptions, but not others.

Exemption limits also apply to equity debtors may have on their real property. Equity is defined as the difference between what the debtor owes on the real property and the actual value of the real property. For example, if you took out a $200,000 mortgage on a house worth $300,000 you would have $100,000 equity in the home.

Some equity is covered by exemptions, so the debtor can repay a previous loan. If the exemption doesn’t cover all of the property, then the appointed trustee can liquidate the asset and distribute the profits. However, remember that not all properties are exempt. You can still keep property without exemption by paying the trustee value of the property.

In addition to the above, there could be federal exemptions for which you are eligible. The federal exemptions are in addition to your Arizona exemptions. In the end, you should contact a lawyer to check out your eligibility for federal exemptions.

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bankruptcy, bankruptcy attorneys, Business Bankruptcy in Scottsdale, personal bankruptcy attorneys

Regular Post

Written by Canterbury Law Group

17 August 2016

Does Bankruptcy Affect Students Financial Aid?

As back to school season is here, many parents are wondering if a previous bankruptcy can affect eligibility for education loans. Although it may affect some loans, it does not affect eligibility for certain forms of financial aid.

The Bankruptcy Reform Act of 1994 (P.L. 103-394) amended the US Bankruptcy Code at 11 USC 525(c) to prohibit denial of government student grants and loans based solely on the student’s or borrower’s past or present filing of a bankruptcy petition. The only exception is the Federal PLUS loan.

A child is eligible for federal student loans, such as the Stafford loan, regardless of the parent’s history of bankruptcy. Also, the Stafford loan does not depend on the borrower’s credit history in any way.

A parent’s history of bankruptcy also does not affect the child’s eligibility for federal grants, state grants, scholarships and money from the college, nor student employment programs like Federal Work-Study. The parent may also be eligible for tuition installment plans because these plans are usually structured as a qualified education loans to make them difficult to discharge in bankruptcy.

However, parents are ineligible to borrow from the PLUS loan program for five years from the date of the bankruptcy discharge. By law, PLUS loan borrowers must not have an adverse credit history. The regulations define an adverse credit history as having had a bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment or default determination in the last five years or a current delinquency on any debt of 90 or more days.

If a child’s parent is denied a PLUS loan because of an adverse credit history, the child becomes eligible for increased unsubsidized Stafford loan limits. Parents with a recent bankruptcy will be ineligible to serve as the borrower or co-signer on most private student loans. The provisions of the Bankruptcy Reform Act of 1994 apply only to federal student loans, not private student loans. Most lenders of private student loans ask about bankruptcy filings in the last 7 or 10 years. It really doesn’t matter whether the filing was under chapter 7, 11 or 13, as the lenders will be wary of lending money to anybody with a recent bankruptcy filing.

The bankruptcy lawyers at Canterbury law Group work attentively with bankruptcy clients to secure their fresh financial freedom. Whether filing as an individual or for your business, the bankruptcy attorneys at Canterbury Law Group are experienced experts in all areas of bankruptcy cases in the Phoenix area. Please call us today to schedule your consultation.

Regular Post

Written by Canterbury Law Group

13 July 2016

Arizona Bankruptcy Exemptions

We help clients determine eligible exemptions for their bankruptcy case. Here are some of the most common exemptions available under Arizona law (meaning that they will emerge from bankruptcy):

Alimony and Child Support – Alimony and child support, up to the amount needed for support. 33-1126.
Bank Deposit – A debtor may exempt $300 in a single bank account. Ariz. Rev. Stat. Ann. § 33–1126(8).
Homestead or Residential Property – Under Arizona law, debtors may exempt up to $150,000 (per debtor or married couple) of their home or other real property covered by the homestead exemption. Ariz. Rev. Stat. Ann. §§ 33–1101, 33–1103 and 33–1104.
Insurance Benefits – Life insurance benefits that are payable or received by a surviving spouse or child, up to $20,000.
Claims for the destruction of, or damage to, exempt property – Cash surrender value of life insurance policies, subject to length of ownership requirements and other exceptions.
Motor Vehicles – A debtor may exempt up to $6,000 in one or more motor vehicles. An elderly or disabled debtor, or an elderly or disabled spouse or dependent of the debtor, may exempt up to $12,000.
Pension and Retirement Benefits – Benefits from various employee pension systems are exempt. Ariz. Rev. Stat. Ann. §§ 33–1126 and 38–792.
Personal Property – A debtor may exempt the following personal property:
- up to $6,000 in household furniture and appliances not covered by other exemptions
- up to $1,000 total in bible, bicycle, sewing machine, typewriter, computer, burial plot, rifle, pistol or shotgun
- up to $500 in clothing
- up to $400 in musical instruments
- up to $800 in animals
- up to $2,000 in engagement and wedding rings
- up to $250 in books
- up to $150 in watch
- wrongful death awards
- prepaid rent or security deposit to $2,000 or 1.5 times your rent, whichever is less, in lieu of using homestead exemption.
- all teaching materials for youth, and
- certain professionally prescribed health aids.

Tools of the Trade – A debtor may exempt up to $5,000 in trade implements, which includes farming tools if the debtor’s primary income is from farming. All arms and uniforms that a debtor is legally required to keep are exempt. Library and teaching aids of a teacher.
Unemployment Compensation – Unemployment compensation is exempt as long it is not commingled with other funds and except for the enforcement of child support orders. Ariz. Rev. Stat. Ann. § 23–783.
Wages – A debtor may exempt the lesser of the following wages, per week:
- 25% of his or her disposable earnings, or
- earnings in excess of 30 times the federal minimum wage
- Workers’ Compensation – A debtor may exempt up to $6,000 in one or more motor vehicles. An elderly or disabled debtor, or an elderly or disabled spouse or dependent of the debtor, may exempt up to $12,000.

Our legal team is ready to represent you in your Scottsdale business or personal bankruptcy case. Call us today to schedule your consultation. Our track record speaks for itself! 480-744-7711.

Regular Post

Written by Canterbury Law Group

17 February 2016

Three Tips for After Bankruptcy

The personal bankruptcy attorneys at Canterbury Law Group help clients begin a fresh financial future. Not only can the law team at Canterbury help you successfully navigate through bankruptcy, they can also assist with creating a sound financial afterlife.

Here are three tips for those who are ready to improve their financial status:

Regroup – Once your bankruptcy case has been discharged, reflect on your past financial journey. Ask yourself questions that will help you create a better financial afterlife in the wake of bankruptcy, including:

How did I get here?
What could I have done differently?
And what have I learned from all of this?

Create a Realistic Budget and Pay Bills on Time – After bankruptcy, you must become vigilant about your finances. Even if you haven’t created a budget in the past, now is the time to get serious about doing so. Your budget will act as your spending plan, helping you to manage cash flow and preventing you from creating unnecessary debt. Make it a priority to pay all your current bills in a timely manner. Set up automatic bill payments, and remember to pay your rent on time since rent payments are now being tracked by the credit bureaus.

Pick a Credit Card That Will Help You Rebuild Credit – A key strategy to rebuilding your credit rating after bankruptcy is to obtain a secured credit card. With a secured card, you deposit a given amount of money, such as $500, into a bank account and that $500 becomes your credit limit. By charging small amounts each month and repaying your debts as agreed, you can gradually rebuild your credit.

If you have questions about your finances and / or bankruptcy, call Canterbury Law Group today to schedule a consultation. 480-744-7711.

bankruptcy, bankruptcy attorneys, Filing Bankruptcy in Scottsdale, personal bankruptcy attorneys

bankruptcy, bankruptcy attorneys, Business Bankruptcy in Scottsdale, Chapter 7 bankruptcies, personal bankruptcy attorneys

Regular Post

Written by Canterbury Law Group

6 January 2016

Get Rid of Debt in the New Year

The personal bankruptcy attorneys at Canterbury Law Group are constantly helping clients permanently rid their lives of debt. As the New Year is swiftly approaching, the law team at Canterbury knows that motivation about personal finances will be on the rise. In fact, many Americans add “getting out of debt” to their resolutions for the New Year.

If you are ready to start fresh financially, we suggest five simple tips to eliminate debt from your life:

Stop adding more debt: If you are trying to eliminate debt, it is crucial to avoid adding more debt to your “debt pile.”
Eliminate credit cards: One of the biggest down falls that most of us have is the reliance on credit cards. If you cannot control how much you spend when using credit cards, then cut up your cards or leave them at home until you are out of debt.
Cut your spending: Can you save some money after all of your bills are paid? Look at all aspects of your spending in hopes to add more to the debt fund. For instance, try to use your utilities wisely to save on water, electricity and gas, and put that savings towards paying off some debt.
Embrace a (temporary) frugal lifestyle: Although society tends to believe that we need a lot of things to survive, we can actually get by with very little. The more of the excesses you can trim out the sooner you will be out of debt.
Always lookout to improve your current income: The more the money you make, the more you will have left over to throw at your debt.

If you have questions about your finances and / or bankruptcy, call us today to schedule a consultation at 480-744-7711 or [email protected].

bankruptcy, bankruptcy attorneys, personal bankruptcy attorneys

Filing Bankruptcy in Scottsdale, personal bankruptcy attorneys