How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Ellen Your Own Question
Ellen, Attorney
Category: Bankruptcy Law
Satisfied Customers: 36714
Experience:  Bankruptcy Lawyer. Experienced.
Type Your Bankruptcy Law Question Here...
Ellen is online now
A new question is answered every 9 seconds

I am having confusion over being able to use AZ homestaed laws

This answer was rated:

I am having confusion over being able to use AZ homestaed laws to protect my home equity in BK. I have lived in AZ for 1.5 years moved from California. I have a rental property in CA that I have been struggleing to keep. I have been sucessful in obtaining a loan mod on the first but a home equity line of credit i defaulted on and they are suing me in CA civil court, I recieved by registered USPS mail (improper service??) a notice of Case Management Conference and Order. I have mot filed BK yet. I am concerned over being forced to sell my primary residence in AZ that I have equity in (less than $150K). I dont know how long it will take the home equity to get a lein or judgement but it looks like the process has started. BTW the financial occured due to medical probs I've been on disabilty for 2.5 years now.

Thank you for your question.

No special filing is required to obtain the Arizona homestead exemption. You are entitled to it as a matter of law.

Here is the statute relating to Arizona homestead protection:

33-1102. Exemption by operation of law; designation of multiple properties on creditor's request; recording

A. A person who is entitled to a homestead exemption as prescribed by section 33-1101 holds that exemption by operation of law and no written claim or recording is required. If a person has more than one property interest to which a homestead exemption may reasonably apply, a creditor may require the person to designate which property, if any, is protected by the homestead exemption. The creditor shall demand the designation by sending a letter by certified mail, return receipt requested, to each address of the person which may reasonably be protected by the homestead exemption. The person shall designate the property by recording a homestead exemption in the office of the county recorder where the property is located or by sending the creditor a certified letter, return receipt requested, within thirty days of receiving the creditor's demand letter. If the person receives the creditor's letter and fails to respond as provided by this subsection, the person may only assert the homestead exemption by recording a claim in the office of the county recorder where the property is located.

B. If the person is married, the homestead may be selected from the community property, the joint property or the separate property of the person.
Customer: replied 7 years ago.

What about this?

State Residency Requirements for the Homestead Exemption

Prior to the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, many people would, before filing for bankruptcy, move to another state that had a more generous homestead exemption than the one they were living in. The new law has much stricter requirements as to which state's home exemption you can use. However, if you live in a state that allows the choice of federal exemptions, then you can choose the federal exemptions regardless of how long you were living in the state.

If you have lived in your home for at least 40 months before filing, or if you have lived in your home for less than 40 months, but purchased it after selling another home in the same state that you lived in more than 40 months earlier, then you can use your current state's exemption. However, if you have been convicted of a felony, a securities violation, or an intentional tort that caused severe bodily injury or death, then your homestead exemption may be limited to $125,000. If your state's exemption is greater than this, then the judge will determine whether to apply the limit.

If you acquired your home within the previous 40 months and have lived in the state for at least 2 years, then you can use that state's exemption up to $125,000.

If you have lived in your state for less than 2 years, then you must use the exemptions of the state-up to $125,000-in which you lived the longest in the 180 period before the 2 years before filing-in other words, in the time period of about 2 to 2 ½ years before filing for bankruptcy.

If you have disposed of any nonexempt assets in the 10 years before filing to protect it from creditors, then your exemption may be reduced by the value of the assets.

I have lived in AZ for 1.5 years and I am unsure if I can use their homestaed exemption. In that case do I use California's (my previous residence) for exemption amounts and does that mean I should hire a CA BK attourney to file.


You will want to consider not filing bankruptcy until the 2 years have expired. However, this does not mean that the lien can attach and impair your homestead. The statute that I gave you protects your homestead without the restriction related to the time period outside of bankruptcy.
Ellen and other Bankruptcy Law Specialists are ready to help you
Customer: replied 7 years ago.
Does that mean the statute you provided will provide me AZ homestead exemption with out a 2 year wait?
Yes but not for bankruptcy purposes. instead it will protect your homestead while you are awaiting for the two-year period to expire. At the expiration of the two-year period, you may file bankruptcy and use the Arizona exceptions

It is complicated.
Customer: replied 7 years ago.

So if a judgement or lein is placed before the BK homestead exemption is in place could I be forced to liqidate my home?

No. Your equity is protected under the exemption under the statute I gave you. This is true even if you never file a bankruptcy
Ellen and other Bankruptcy Law Specialists are ready to help you