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            Many people end up owing more money than they can ever afford to repay.  There are many reasons why people have debt.  Sometimes it is bad luck.  Sometimes it is bad decision making.  For whatever reason, there may come a time when you are not able to pay back the debts that you owe.

            When a creditor starts to collect their debt, a debtor will want to know what he or she can keep and what he or she may lose to their creditors.   Every state has laws that allow its residents to shield certain property from creditors.  It is not in the public interest to leave someone homeless and destitute and without the ability to maintain the most basic of support.

            The property that a person can keep from his or her creditors is called “exempt” property and everything else that someone owns can be taken by a creditor that has a judgment.  In Arizona, the most common assets that are exempt include a home (called a homestead) with up to $150,000 of equity (value in excess of consensual liens), qualified retirement plans, household furnishings and furniture with value of $6,000 for each spouse and a car with $6,000 of equity for each spouse (either $12,000 in one care or two cars with $6,000 equity in each one). 

A list of all of the Arizona exemptions is attached here.

            Exemptions don’t apply to a creditor with a voluntary lien (like a mortgage company or a car lender).  Many exemptions don’t apply to the collection of child support or spousal maintenance.  Most exemptions contain a “cap” on the value of the exemptions.  A few, like a pension, have no cap.  Other exemptions require that the debtor own the asset for a certain period of time before it becomes exempt.

            If you have assets that you want to protect from creditors who already exist, there are only a few things that can be done without committing fraudulent acts.  If you have assets that you want to protect and have no current creditors, there are more asset protection devices that are available to you.  Qualified counsel can assist you in this preparation.