What Property is Exempt in Chapter 7 Bankruptcy?

If you file for Chapter 7 bankruptcy in Phoenix, Arizona, there are some of your possessions that will be considered exempt from use in debt repayment.  For the most part this will only be clothing, furniture, and food.  You may be able to keep any tools that are necessary for you to earn a living.  Some of your household items may be left to you.  But you should prepare yourself for losing everything that you own of value including jewelry and electronics.

Prior to filing for Chapter 7 bankruptcy in AZ, you may sell your property and use the proceeds to purchase items that will be exempt.  Be careful, though, that you observe this common guideline:

• Do not give away your property to family or friends with the intent of having them return it to you.  For one full year before you file Chapter 7 bankruptcy, any property transfer without receiving fair market value is considered fraudulent.

You will be required to swear an oath in court that you have been honest in reporting your property in a Chapter 7 bankruptcy filing.  If the court were to discover that you had given away non-exempt property, you could be denied the discharge of bankruptcy.  Or worse, you could be charged with a crime.

The best strategy for Chapter 7 bankruptcy is to consult with an experienced bankruptcy law firm.  Your bankruptcy attorney will advise you on the best way to handle your specific property before, during, and after the bankruptcy filing.  Skilled bankruptcy lawyers can help you file for a Chapter 7 bankruptcy that meets all legal requirements.