There are many different factors that apply to the Arizona Bankruptcy Laws and one that has many parts to it is the Bankruptcy Exemption Laws. These laws portray how people are able to continue to live a dynamic life while going through bankruptcy.
Protecting Your Assets in Bankruptcy: Arizona Property Exemption Laws
Property you get to keep:
The law of what has come to be called "Asset Protection" is actually a mixture of laws that allow you to keep certain property no matter what, even if you owe money to others. Every state has laws that designate specific property you get to keep so that you can continue living a productive life. That is, even if you owe a trillion dollars to someone, the law won't make you sell the shirt off your back to pay it. And in Texas and Florida, they won't even make you sell your million dollar mansion, or in Nevada, your gun.
These rules are called "property exemptions." They vary from state to state. They designate what property is off limits to your 'creditors '-- the legal name for those who claim you owe them money.
When you fill out your bankruptcy forms (Form 6, Schedule C), you will be asked what property you claim as exempt -- and a citation of the law that allows it.
This page gives you those citations and gives a brief summary of the exemption.
*Exemptions & "secured debts":
Note that property that is collateral for a purchase-money loan (such as a car securing a car loan or a home securing a first mortgage) is not protected by exemptions from repossession actions by that lender. Any equity you may own in the property is protected and may give you certain rights against holders of judgment liens and second or third lien holders.
Let's repeat that first point before we go further: Exemption laws do NOT protect you from losing property if you've voluntarily pledged the property as security for a loan and you don't make the payments.
To read more click here.