There are exemptions to collection under Arizona and Federal law. The goal of these exemptions is to find a balance that allows a debtor to pay off a debt without throwing them out into the street. Assets and property that is exempt under the law cannot be taken from you by debt collectors, garnishments, or in a bankruptcy.
In Arizona, these collection, garnishment & bankruptcy exemptions include:
(Note: All values stated are fair market value – meaning what an informed, willing buyer would pay in an open marketplace)
General & Household Exemptions
| Item | Maximum dollar value of item exempt | Arizona Statute |
| Homestead – interest in property where a debtor lives. Includes single family house, condo, townhouse, or mobile home. | 150,000 | A.R.S. § 33-1101 |
| Personal Property (Note: A husband and wife can double the maximum dollar value) | ||
| Household furniture, appliances, and household goods | 6,000 | A.R.S. § 33-1123 |
| Six months worth of food, fuel, and provisions | A.R.S. § 33-1124 | |
| Clothes | 500 | A.R.S. § 33-1125(1) |
| Musical Instruments for personal use | 400 | A.R.S. § 33-1125(2) |
| Domestic pets, horses, dairy cows, and poultry | 800 | A.R.S. § 33-1125(3) |
| Engagement and wedding rings | 2,000 | A.R.S. § 33-1125(4) |
| Personal library of books, manuals, and documents | 250 | A.R.S. § 33-1125(5) |
| One Watch | 150 | A.R.S. § 33-1125(6) |
| One typewriter, one computer, one bicycle, one burial lot, one family Bible, and one gun | 1,000 | A.R.S. § 33-1125(7) |
| Equity in one car (Equity is the fair market value minus debt to a secured creditor) | 6,000 or 12,000 (if debtor or a dependent of the debtor has a physical disability) | A.R.S. § 33-1125(8) |
| A wheelchair or professionally prescribed prostheses | No maximum | A.R.S. § 33-1125(9) |
| Miscellaneous Exemptions | ||
| School Equipment | A library, chemical, or philosophical item used for teaching in a school or institution of higher learning. | A.R.S. § 33-1127 |
| Fire Fighting Equipment | Firefighting equipment operated by a fire organization or department authorized under Arizona law | A.R.S. § 33-1128 |
| Public Property | Public property including court houses, public houses, public land and grounds, parks, etc… | A.R.S. § 33-1129 |
| Tools and Equipment | Tools and equipment used in a commercial activity, including telephone numbers, client information, websites, and domain names not exceeding $5,000. | A.R.S. § 33-1130(1) |
| Farm Machinery | Farm Machinery, feed, seed, grain, and animals, not to exceed $2,500, where a debtor’s primary source of income is farming. | A.R.S. § 33-1130(2) |
| Arms and uniforms | All arms, uniforms, and accoutrements required by law to be kept by debtor. | A.R.S. § 33-1130(3) |
Exempt Wages, Salary, Compensation, Pensions
| Wages, Salary Compensation | Seventy-five percent (75%) of disposable earnings. In other words, a garnishment can only take 25% of a debtor’s weekly disposable wages. If the debtor claims a hardship, a creditor may only garnish 15% of a debtor’s disposable wages. | A.R.S. § 33-1131(B), (C), (D) |
| Pensions | Arizona Board of Regents members – benefits, annuities and employee and employer contributions established by the Arizona Board of Regents pursuant to A.R.S. § 15-1628. | A.R.S. § 15-1628(I) |
| IRA | In re Herrscher, 121 B.R. 29 (D. Ariz. 1990) | |
| Police Officers Pension. Exemption does not apply to court orders which are the result of a judgment for arrearages of child support or for a child support debt. | A.R.S. § 9-931 | |
| Fire Fighters’ Relief and Pension Fund and distributive portions therefrom. Exemption does not apply to court orders which are the result of a judgment for arrearages of child support or for a child support debt. | A.R.S. § 9-968 | |
| Arizona State Retirement System – state employee’s survivor benefits before retirement. | A.R.S. § 38-762 | |
| Public Safety Personnel Retirement System – benefits, employee contributions or employer contributions, including interest, earnings and all other credits | A.R.S. § 38-850(C) | |
| Arizona Rangers’ Pension | A.R.S. § 41-955 |
Exemptions: Public Benefits
(Welfare, Workers Comp, Unemployment)
| Unemployment compensation benefits are exempt where proceeds are not commingled with other funds, except debts incurred for necessaries furnished to the individual or his or her spouse or dependents during the time when the individual was employed. | A.R.S. § 23-783 |
| Workers’ compensation benefits | A.R.S. § 23-1068 |
| Welfare assistance benefits | A.R.S. § 46-208 |
Money Benefit Exemptions
There are certain money benefit exceptions under Arizona law. These are:
| Money Benefit | Maximum dollar value exempt | Arizona Statute |
| Life insurance proceeds payable to surviving spouse or child upon the life of a deceased spouse, parent or legal guardian. | 20,000 | A.R.S. § 33-1126(A)(1) |
| Minor child’s earnings unless debt to be discharged was contracted for the special benefit of the minor child. | All earnings | A.R.S. § 33-1126(A)(2) |
| Child support or spousal maintenance received pursuant to a court order. | All support or maintenance | A.R.S. § 33-1126(A)(3) |
| All money, proceeds or benefits from employer health, accident, disability insurance benefits or similar employer benefit program. | A.R.S. § 33-1126(A)(4) | |
| All proceeds from destruction of or damage to exempt property and all proceeds or benefits arising from fire or other insurance on exempt property. | A.R.S. § 33-1126(A)(5) | |
| Cash surrender value of life insurance policies where for a continuous unexpired period of two years such policies have been owned by a debtor and have named as beneficiary the debtor’s surviving spouse, child, parent, brother or sister, or any other dependent family member, except for the amount of any premium that is avoidable by a creditor as a fraudulent transfer. | A.R.S. § 33-1126(A)(6) and A.R.S. § 20-1131(D) | |
| An annuity contract where for a continuous unexpired period of two years such contract has been owned by a debtor and has named as beneficiary the debtor, debtor’s surviving spouse, child, parent, brother or sister, or any other dependent family member, except for the amount of any premium that is avoidable by a creditor as a fraudulent transfer. | A.R.S. § 33-1126(A)(7) | |
| Any claim for damages for levy upon or sale under execution of exempt personal property or for wrongful taking or detention of exempt personal property. Does not apply to annuities, nor to cash surrender values increased by premium payments made within two years in excess of the average annual premium paid during the previous three years. | A.R.S. § 33-1126(A)(8) | |
| Bank deposit not to exceed $300. This sum is not exempt from normal service charges assessed by the bank holding the funds. | 300 | A.R.S. § 33-1126(A)(9) |
| Benefits from ERISA-qualified retirement plan or deferred compensation plan except those amounts contributed within 120 days before a debtor files for bankruptcy. Does not apply to an alternate payee under a qualified domestic relations order. Does not apply to assets of bankruptcy proceedings filed before July 1, 1987. Not exempt from orders resulting from a judgment for child support arrearages or child support debt. | A.R.S. § 33-1126(B) | |
| Prepaid rent, including security deposits as provided in § 33-1321(A) for debtor’s residence, not exceeding the lesser of $2,000 where debtor has not claimed a homestead exemption. Not exempt from orders resulting from a judgment for child support arrearages or child support debt. | 2,000 | A.R.S. § 33-1126(C) |
| Group life insurance policy or proceeds. | A.R.S. § 20-1132 |
Federal Garnishment & Bankruptcy Exemptions
The Federal Government has also implemented a number of assets and items that are exempt from garnishment in any state. Here are the federal exemptions that prohibit collections:
Exempt Retirement Benefits
| Government employees’ retirement payments | 5 U.S.C. § 8346(a) |
| Annuities paid to members of the armed services, based on retirement or retainer pay. | 10 U.S.C. § 1440 |
| Foreign service employees – Benefits, annuities, or payments to survivors of foreign service employees under the Foreign Service Retirement and Disability System. | 22 U.S.C. § 4060(c) |
| Special pensions awarded to persons on the Army, Navy, Air Force and Coast Guard Medal of Honor roll. | 38 U.S.C. § 1562(c) |
| Payments of benefits due or to become due under any law administered by the Veterans’ Administration. | 38 U.S.C. § 3101 |
| Retirement annuities paid pursuant to the Railroad Retirement Act of 1974, 45 U.S.C. §§ 231 et seq. | 45 U.S.C. § 231m |
| Social security benefits | 42 U.S.C. § 407 |
| Central Intelligence Agency retirement benefit payments | 50 U.S.C. § 403 |
Survivor Benefit Exemptions
| Military survivor annuities paid pursuant to the Survivor Benefits Plan | 10 U.S.C. § 1450(i) |
| Annuities paid to survivors of a Justice or judge of the United States, a Director of the Administrative Office of the United States Courts, a Director of the Federal Judicial Center, or an administrative assistant to the Chief Justice of the United States | 28 U.S.C. § 376(n) |
| Benefits paid to surviving spouses of lighthouse service personnel. | 33 U.S.C. § 775 |
Exempt Death and Disability Benefits
| Disability and death benefits paid to federal government employees as a result of work injuries. | 5 U.S.C. § 8130 |
| 75% of earned but unpaid wages | 33 U.S.C. § 916 |
| Compensation paid for injury or death resulting from a war risk hazard under the War Hazards Compensation Act, 42 U.S.C. § 1701 et seq | 42 U.S.C. § 1717 |
Exemptions: Federal Money, Benefits, and Proceeds
| A United States service member’s deposits in a savings institution while the depositor is on permanent duty outside of the United States. | 10 U.S.C. § 1035(d) |
| Benefits due or to become due under servicemen’s group life insurance. | 38 U.S.C. § 1970(g) |
| Veterans’ benefits | 38 U.S.C. § 5301(a) |
| Exempts from offset by federal government agencies an amount not to exceed $9,000 owing to a debtor under the Social Security Act, the Black Lung Benefits Act, or laws administered by the Railroad Retirement Board. | 31 U.S.C. § 3716(c)(3)(A) |
| Railroad workers’ unemployment insurance benefits | 45 U.S.C. § 352(e) |
Help with Exemptions
If you have concerns about whether or not any assets you have qualify under these bankruptcy exemptions, or if a debt collector is threatening to garnish or take exempt assets from you, please contact us for assistance. A consultation with a Cayalyst Bankruptcy Lawyer is free.