In May, Governor Doug Ducey signed House Bill (HB) 2617 into law, which will go into effect on Dec 31st and raises the amount of money protected from debt collectors to $250,000 from $150,000. While this new law may sound like good news for Arizona homeowners, HB 2617 favors debt collectors because the law makes it easier for them to place a lien on the debtor’s home if they owe money.
Essentially, the new law means that any outstanding debt owed can now be attached to home equity. Normally, even if a homeowner owes a creditor or creditors outstanding debts, the amount of equity a homeowner has accrued under the so-called homestead exemption. This exemption is supposed to protect Arizona homeowners from forcibly selling their homes.
Before passage of the bill, “[a]ny person entitled to a homestead exemption ‘[held] the homestead property free and clear of the judgment lien.” However, with the passage of HB 2617, any homeowner who has lost a civil judgment will potentially no longer have equity protection.
Moreover, HB 2617 not only applies to civil judgments announced on January 1, 2022 and onward, the new legislation is retroactive, covering past civil judgments, which a judge could thereby place towards a lien on the debtor’s home.
Essentially, the new law enables creditors to collect on the debts owed and may do so by forcing the sale of the debtor’s home.
If you feel burdened by your current financial situation, talking with an experienced bankruptcy attorney in Arizona will help set your mind more at ease.
A skilled bankruptcy attorney will guide you through various court proceedings to reduce or eliminate your debt, or to proceed forward with bankruptcy if necessary. The best place to find a bankruptcy attorney in Arizona is through Attorney at Law.
At AAL, we match you with the best bankruptcy attorneys in Arizona. Our partners have the resources, legal expertise, and experience to navigate you through the highly complex field of bankruptcy law. In addition to a proven track record, our partners also excel in client care.
Don’t wait. Contact AAL today for a free, no-obligation consultation and begin your journey to financial independence.