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The Tools of the Trade Exemption in Arizona; Read it Yourself!

By Joseph McDaniel, Esq.

Here it is, so you can see it for yourself. Enjoy!

My initial comments and observations follow.

33-1130. Tools and equipment used in a commercial activity, trade, business or profession
The following tools and equipment of a debtor used in a commercial activity, trade, business or profession shall be exempt from process:
1. The tools, equipment, instruments and books of a debtor or the spouse of a debtor primarily used in, and necessary to carry on, the commercial activity, trade, business or profession of the debtor or the debtor's spouse, not in excess of an aggregate fair market value of two thousand five hundred dollars. For the purpose of this paragraph, "tools" do not include a motor vehicle primarily used by a debtor for personal, family or household purposes such as transportation to and from the debtor's place of employment.
2. Farm machinery, utensils, implements of husbandry, feed, seed, grain and animals not in excess of an aggregate value of two thousand five hundred dollars belonging to a debtor whose primary income is derived from farming.
3. All arms, uniforms and accoutrements required by law to be kept by a debtor.

Now, given the upcoming certainty of exemption wars in Arizona, there are things I like about this statute: one is the use of the words "debtor or the spouse", which should make it clear that we can use up to $5,000 on the tools of the trade of either spouse to exempt tools of the trade.

I love the word "shall", which is much more serious than the word "will", or, God Help Us, "may". 

I also like the use of the word "primarily", which is a lot better in exemption objection litigation to the word "exclusively".

And I like the broad scope of the phrase "commercial activity, trade, business or profession of the debtor or the debtor's spouse".

I think the exemption wars will not be one-sided. Debtors have arguments, as well as trustees, although until a bankruptcy judge rules, nobody knows anything! And if, as is entirely possible, we turn out to have multiple United States Bankruptcy Judges who have multiple different opinions on the issue of the tools of the trade exemption, we won't know anything until the next level up makes a ruling.


But he who lives longest sees the most!

And when there's breaking news on the Arizona Bankruptcy Exemption War, you'll hear it from the front; I'm sort of embedded with the troops!

Full post as published by Arizona Bankruptcy Attorney Blog on November 07, 2010 (boomark / email).