Arizona’s dramatically expanded homestead exemption keeps the liquidation test floor low for most homeowners in Chapter 13 — since 2022’s Proposition 209 nearly tripled the protected amount, most Arizona homeowners no longer contribute unprotected home equity to their plan’s minimum payment to unsecured creditors, a real shift from how Arizona bankruptcy worked before the law changed.
How Chapter 13 Works in Arizona
You file a petition and propose a repayment plan lasting three to five years. A standing Chapter 13 trustee collects your monthly payment and distributes it — secured debts first, then priority claims, then whatever’s left goes to unsecured creditors. You keep all your property throughout, and remaining qualifying unsecured debt is discharged when the plan completes.
The exemptions you claim set your plan’s liquidation test floor — the minimum unsecured creditors must receive.
How Arizona’s Expanded Homestead Exemption Affects Your Plan
Arizona’s homestead exemption protects $437,600 in home equity (2026 figure, up from a $400,000 base set by 2022's Proposition 209). Adjusted upward every January 1 for inflation. That’s up from $150,000 before 2022’s Proposition 209, meaning a filer whose home equity would have driven a high liquidation test floor under the old law may now see the housing portion of that floor drop to zero. Arizona is an opt-out state, so filers must use Arizona's own exemption list rather than the federal exemptions. Arizona also has no general wildcard exemption - property has to fit a specific statutory category to be protected.
Why Arizona Filers End Up in Chapter 13
Mortgage arrears are the most common driver — catching up on missed payments without losing the house, especially valuable given how much equity Arizona homeowners have built as home prices have risen. Income above the means test threshold is the second major factor, pushing higher-earning filers into a repayment plan.
Do You Qualify for Chapter 7 Instead? The Means Test
Arizona’s current median income figures:
- 1 person: $73,935
- 2 people: $89,027
- 3 people: $104,965
- 4 people: $121,174
- Each additional person: add $11,100
Filers above the median for their household size generally must commit to a five-year plan; those below can propose three years.
Mortgage Cure in Arizona
Filing Chapter 13 triggers the automatic stay, halting foreclosure immediately. The plan spreads mortgage arrears across its three-to-five-year duration while you resume regular payments going forward — a meaningful protection given how much equity Arizona homeowners often have at stake.
Vehicle Treatment and Cramdown
Arizona exempts $15,000 in equity in one motor vehicle, or $25,000 if the filer or a dependent has a physical disability. If your car loan was originated far enough before filing and the vehicle is worth less than the remaining balance, the plan can cram the loan down to the vehicle’s current market value at a court-approved interest rate.
Which Federal District Do You File In?
District of Arizona - a single statewide district with divisional offices in Phoenix, Tucson, and Yuma. Phoenix covers Maricopa, Yavapai, Coconino, Navajo, Apache, and Gila counties; Tucson covers Pima, Pinal, Cochise, Graham, Greenlee, and Santa Cruz counties.How Much Does a Chapter 13 Attorney Cost in Arizona?
Chapter 13 attorney fees in Arizona typically run $3,000 to $4,500, on top of the 313 federal filing fee. Most of the fee is built into the plan itself.
Common Mistakes Arizona Filers Make
Using an outdated homestead figure. Attorneys and filers who haven’t updated their understanding since 2022 may still be planning around the old $150,000 cap.
Assuming a wildcard exemption exists. Arizona has no general catch-all exemption — non-homestead, non-vehicle property has to fit a specific listed category to be protected, which can affect the liquidation test.
Missing required tax filings during the plan, which can trigger a motion to dismiss.
Overlooking a non-filing spouse’s income in the means test.
A Realistic Example
Consider a filer we’ll call Sofia, living in Tucson. She works as a paralegal and fell behind on her mortgage after a period of reduced hours. She owns her home with about $250,000 in equity.
Arizona’s current $437,600 homestead exemption fully covers her equity with substantial room to spare, keeping her liquidation test floor at zero on the housing side — a very different outcome than she would have faced under Arizona’s pre-2022 exemption law.
Her income lands above Arizona’s median for a household of one, so she commits to a five-year plan. The mortgage arrears are spread across the plan while she resumes regular payments. Five years later, the mortgage is current and the remaining unsecured debt is discharged.
Frequently Asked Questions About Chapter 13 Bankruptcy in Arizona
Can Chapter 13 stop foreclosure in Arizona?
Yes. Filing triggers the automatic stay, which halts foreclosure immediately. Your plan then spreads the mortgage arrears across three to five years while you resume regular payments.
How much home equity does Arizona protect in Chapter 13?
$437,600 as of 2026, up from $150,000 before 2022’s Proposition 209 nearly tripled the exemption and tied it to annual inflation adjustments.
How long does a Chapter 13 plan last in Arizona?
Three to five years. Filers with household income above Arizona’s median for their household size generally must propose a five-year plan; those below can propose three years.
Can I keep my car in an Arizona Chapter 13?
Yes — Chapter 13 doesn’t require giving up property. If your car loan is old enough and the vehicle is worth less than the loan balance, the plan may also cram down the loan to the vehicle’s current value.
What is the Arizona bankruptcy means test income limit?
It depends on household size and updates periodically. Current thresholds are roughly $73,935 for one person, $89,027 for two, $104,965 for three, and $121,174 for four, with $11,100 added per additional person.
Does Arizona have a wildcard exemption in Chapter 13?
No. Arizona has no general wildcard exemption. Property must fit a specific statutory category to be protected, which can affect the plan’s liquidation test.
Where to Verify the Details
Arizona’s exemption statutes are published in ARS § 33-1101. For current means test figures, check the U.S. Trustee Program website.
Alternatives to Chapter 13 in Arizona
If you pass the means test and don’t need to cure a mortgage, our Chapter 7 guide for Arizona explains how straight liquidation might discharge your debt faster. For a breakdown of costs in the Phoenix area, see our bankruptcy cost guide for Phoenix.
Last reviewed by American Debt Guide Editorial Team. Figures on this page reflect Arizona bankruptcy exemption amounts and federal filing data as of July 2026.