How Arizona's New Homestead Law Will Impact Your Debt Collection Lawsuit & Bankruptcy (2022)

TL;DR

Starting on January 1st, 2022, Arizona will implement a new homestead exemption law that increases the protected equity in homes to $250,000, but also allows judgments to act as liens against properties.

Transcript

hey everybody john skiba here from the consumer warrior youtube channel and in this video i'm going to talk about the brand new homestead exemption law that's going to go into effect in just two days from now in january 1st 2022 there's going to be a new homestead law in the state of arizona and it's going to have big impacts if you're looking to f... Read More

Key Insights

• ✋ Arizona's new homestead exemption law increases the protected equity in homes to $250,000, benefiting homeowners with higher property values.
• 👻 However, the law also allows judgments to act as liens against properties, giving creditors more power in collecting debts.
• 👽 Debt collection lawsuits may become more aggressive, with creditors seeking higher settlements or pushing cases to judgment to attain liens against properties.
• 👽 Bankruptcy filings after January 1st, 2022, with existing judgments will require additional steps to eliminate those judgments and their lien effects.
• 😀 Homeowners facing debt problems, lawsuits, or bankruptcy in Arizona should be aware of the changes in the homestead exemption law and consult with professionals for guidance.
• 🤨 The new law's passage raised concerns among some advocacy groups, as they believe it may weaken the homestead protections and favor creditors' interests.
• 👽 Monitoring and addressing judgments and liens will be crucial for homeowners and bankruptcy attorneys to protect properties and eliminate debts effectively.

Questions & Answers

Q: How does the new homestead exemption law impact those with judgments against them?

Under the new law, judgments will act as liens against homes, allowing creditors to collect on debts, even if the homeowner has filed for bankruptcy or has limited equity in their property. This can lead to potential foreclosure or seizure of assets.

Q: Will the new law affect debt collection lawsuits in Arizona?

Yes, the new law is expected to make debt collectors more aggressive in pursuing judgments, as these judgments can now be used as liens against a homeowner's property. This could lead to higher settlement demands or more cases going to judgment.

Q: What are the implications of the new law for individuals filing for bankruptcy?

If someone files for bankruptcy after January 1st, 2022, and there is an existing judgment against them, that judgment will be treated as a secured debt. To eliminate the judgment, additional steps will need to be taken in the bankruptcy process, potentially leading to higher fees for bankruptcy attorneys.

Q: Is there any upside to the new homestead exemption law?

The increase in the protected equity from $150,000 to $250,000 is beneficial, especially considering the current surge in home values in Arizona. It provides more security for homeowners with significant equity in their properties.

Summary & Key Takeaways

• Arizona's homestead exemption law is changing, with the protected equity in homes increasing from $150,000 to $250,000.

• However, judgments will now act as liens against properties, impacting debt collection lawsuits and bankruptcy filings.

• Creditors will have more opportunities to collect on debts, potentially leading to higher settlements or increased pursuit of judgments.