Arizona’s homestead exemption has nearly tripled in the past few years — from $250,000 to a current $437,600, after 2022’s Proposition 209 raised the base to $400,000 and tied it to annual inflation adjustments. For homeowners, that single change moved Arizona from a middle-of-the-pack exemption state to one of the more homeowner-friendly states in the country for Chapter 7.
How Chapter 7 Works in Arizona
The process follows federal bankruptcy law: file a petition, a trustee reviews your assets against Arizona’s exemption list, and anything not covered is technically available to pay creditors. Most Arizona Chapter 7 cases are “no-asset” cases — the exemptions cover everything the filer owns, and the case closes with a discharge roughly three to four months after filing.
How Much Home Equity Can You Protect in Arizona?
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 a dramatic increase from the $150,000 figure Arizona used for decades before Proposition 209 passed with roughly 72% voter support in 2022. Home values in Phoenix and Tucson have risen substantially over the same period, and the exemption increase has largely kept pace, protecting most homeowners’ equity in full.
Does Arizona Let You Choose Federal Exemptions Instead?
No. 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. Given how generous Arizona’s own homestead exemption now is, this rarely disadvantages homeowners — though the lack of a wildcard exemption is worth understanding for renters and filers without significant home equity.
What Happens to Your Car in an Arizona Chapter 7?
Arizona exempts $15,000 in equity in one motor vehicle, or $25,000 if the filer or a dependent has a physical disability. That’s a genuinely generous figure compared to most states, meaning the large majority of Arizona filers keep their vehicle fully protected regardless of value.
Does Arizona Have a Wildcard Exemption?
None. Arizona has no general wildcard exemption - property must fit a specific statutory category (homestead, vehicle, household goods, etc.) to be protected. This is a real limitation for renters or filers without home equity — property that doesn’t fit a listed category (homestead, vehicle, household goods, tools of the trade) isn’t automatically protected the way it would be in a state with a general wildcard.
Do You Qualify for Chapter 7 in Arizona? 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
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 Bankruptcy Attorney Cost in Arizona?
Chapter 7 attorney fees in Arizona typically run $1,500 to $3,000, on top of the 338 federal filing fee.
Common Mistakes Arizona Filers Make
Using an outdated homestead figure. Filers who researched Arizona’s exemptions before 2022 may still believe the cap is $150,000 — it’s now nearly three times that.
Assuming a wildcard exemption exists. Unlike most states, Arizona has no general catch-all — property has to fit a specific category to be protected.
Overlooking a non-filing spouse’s income in the means test.
Filing in the wrong division based on a work address instead of a residential one.
A Realistic Example
Consider a filer we’ll call Diego, living in Mesa, part of the Phoenix Division. He works in construction and owns a home with about $310,000 in equity — a figure that would have exposed a large portion to the trustee under Arizona’s old $150,000 cap.
Under the current $437,600 homestead exemption, his entire home equity is fully protected. His paid-off truck worth $22,000 falls comfortably under the $15,000 vehicle exemption once financing is factored in, or his attorney confirms whether any excess needs separate planning given Arizona’s lack of a wildcard.
His income falls below Arizona’s median for a household of one, so he qualifies for Chapter 7 automatically. He files, attends the 341 meeting, and receives his discharge about ninety days later.
Frequently Asked Questions About Chapter 7 Bankruptcy in Arizona
Can I keep my house if I file Chapter 7 in Arizona?
In almost all cases, yes. Arizona’s homestead exemption protects $437,600 in equity as of 2026, up substantially from the $150,000 cap used before 2022’s Proposition 209. Equity above the current threshold isn’t automatically protected.
Does Arizona allow federal bankruptcy exemptions?
No. Arizona is an opt-out state, so filers must use Arizona’s own exemption list. Federal exemptions aren’t available.
How much car equity can I protect in Arizona bankruptcy?
$15,000 in one vehicle, or $25,000 if the filer or a dependent has a physical disability — a relatively generous figure compared to most states.
Does Arizona have a wildcard exemption?
No. Arizona has no general wildcard exemption. Property must fit a specific statutory category — homestead, vehicle, household goods, tools of the trade — to be protected.
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.
Which bankruptcy division do I file in if I live in Phoenix or Tucson?
Phoenix Division covers Maricopa, Yavapai, Coconino, Navajo, Apache, and Gila counties. Tucson Division covers Pima, Pinal, Cochise, Graham, Greenlee, and Santa Cruz counties.
Where to Verify the Details
Arizona’s exemption statutes are published in ARS § 33-1101 and related sections. For current means test figures, check the U.S. Trustee Program website.
Alternatives to Chapter 7 in Arizona
If your income is too high to pass the means test, Chapter 13 bankruptcy in Arizona restructures debt into a three-to-five-year repayment plan instead of liquidation. For a breakdown of what filers pay in the Phoenix area specifically, 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.