Maria and Carlos, a married couple in Arizona, own their primary residence valued at $180,000. They have $45,000 in equity after their mortgage. Carlos recently lost a lawsuit and owes $60,000 in damages to the plaintiff. The plaintiff is seeking to collect by placing a lien on their home. What protection does Arizona's homestead exemption provide?
Correct Answer
B) Up to $400,000 of equity (subject to annual inflation adjustments) is protected from most creditors, so their $45,000 in equity is fully shielded
Under A.R.S. § 33-1101, as amended by Proposition 209 (effective December 2022), Arizona's homestead exemption protects up to $400,000 of equity in a primary residence (with annual inflation adjustments) from most creditors. Maria and Carlos's $45,000 of equity is well within that cap and fully protected.
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At Sonoran Valley Realty in Peoria, a homeowner assumes cash received from refinancing a homestead is treated the same as sale proceeds for homestead protection. What is the most accurate response?
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Jennifer owns a condominium in Phoenix that she purchased as an investment property and rents to tenants. She has never lived in the unit but is considering claiming Arizona's homestead exemption to protect it from creditors. All of the following statements about her situation are correct EXCEPT: