Bankruptcy Exemptions in Arizona: What is the Arizona Vehicle Bankruptcy Exemption?

The Vehicle Bankruptcy Exemption in Arizona:

A.R.S. 33-1125(8) provides that a bankruptcy debtor(s) may exempt;

“equity in one car not greater than $6,000. If debtor (or

debtor’s dependent) is physically disabled, the fair

market value of the motor vehicle must not be greater

than $12,000. (Equity is the fair market value of the

motor vehicle minus debt to secured creditor).”

This bankruptcy exemption applies to the debtor, the debtors spouse, and the dependent (s) of the debtor(s). Both you and your spouse are entitled to one $6,000 exemption each, which can be used on two separate vehicles, or both used on one vehicle.


Assume you and your spouse are filing a joint bankruptcy case in Arizona, that you have 2 vehicles, one valued at 5,500, the other valued at $6,000. In this situation, you both could use your vehicle exemption on each of the vehicles, and they would not be available for creditors.

Assume that you and your spouse have 2 vehicles one valued at $10,500, and another valued at 22,000, with $25,000 owed and a perfected lien on the vehicle for the amount owed. In this situation, both spouses could combine their $6,000 exemptions on the vehicle valued at $10,500, and would not have to use an exemption on the vehicle valued at $25,000 because there is a lien on the vehicle, giving them no equity in said vehicle.

Debtors need to be careful using the Arizona Vehicle Bankruptcy Exemption, and should always seek the advice of competent Arizona bankruptcy attorney.

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