Proposition 209 Arizona Exemptions

What Proposition 209 Changed

Arizona voters approved Proposition 209 in November 2022, and it dramatically raised the protections available to judgment debtors. If you're a creditor trying to collect on a small claims judgment, these numbers define what you can actually reach — and what's off-limits no matter what.

Before Proposition 209, wage garnishment could take up to 25% of disposable earnings, bank accounts were protected only up to $300, and the homestead exemption capped at $150,000. The new thresholds make collection harder, especially on smaller judgments.

The Current Exemption Limits

Here's what's protected as of 2026 under the Proposition 209 framework:

Wages (A.R.S. § 33-1131): The maximum garnishment is the lesser of 10% of weekly disposable earnings or the amount exceeding 60 times the highest applicable minimum wage (federal, state, or local). Arizona's statewide minimum wage is $15.15/hour effective January 1, 2026, so the statewide 60-times floor is $909 per week; use a higher local minimum wage where it applies. For many workers, this means nothing is garnishable at all.

Bank accounts (A.R.S. § 33-1126(A)(9)): The first $5,000 in aggregate deposits per person per financial institution is exempt. If the debtor's checking account holds $4,800, a bank garnishment writ yields nothing.

Homestead — primary residence (A.R.S. § 33-1101): Up to $400,000 in equity is protected. A judgment lien does attach to homestead property under the 2022 amendments to A.R.S. § 33-964(B), but the debtor's exempt equity gets paid first on any sale. If net proceeds after the mortgage don't exceed $400,000, the creditor gets nothing from the property sale.

Motor vehicle (A.R.S. § 33-1125): Equity in one motor vehicle up to $15,000 is exempt ($25,000 if the debtor or a dependent has a physical disability). "Equity" is fair market value minus active auto loans. Most standard vehicles driven by judgment debtors don't have equity above $15,000.

Household goods and furnishings (A.R.S. § 33-1123/33-1125): Up to $15,000 in aggregate equity.

Tools of the trade (A.R.S. § 33-1130): Up to $10,000 for instruments and equipment required for the debtor's profession.

Retirement accounts (A.R.S. § 33-1126(B)): 100% exempt. ERISA-qualified 401(k)s, IRAs, pensions, and public retirement accounts are completely untouchable.

How Exemptions Work in Practice

Exemptions aren't automatic in every case — the debtor has to claim them. After you serve a garnishment writ, the debtor receives notice of their exemption rights and has 10 business days to file a Request for Hearing. At the hearing, they need to prove the exempt status of the targeted assets.

But some exemptions apply automatically. The $5,000 bank account protection is applied by the bank itself — it shows up in the Garnishee's Answer before the debtor even responds. Similarly, the bank performs a mandatory two-month lookback for federal benefit deposits (Social Security, SSI, VA) under federal regulation 31 C.F.R. Part 212.

What This Means for Small Claims Creditors

For judgments in the $500 to $5,000 range typical of Arizona small claims, Proposition 209 makes asset screening essential before you spend money on enforcement:

• If the debtor earns under $909/week in disposable income at Arizona's 2026 statewide minimum wage, wage garnishment won't yield a cent; a higher applicable local minimum wage raises that floor
• If their bank balance hovers around or below $5,000, a bank levy is a waste of filing fees
• If their only significant asset is a home with less than $400,000 in equity (most homes), a judgment lien is a long-term play that may never pay out during the judgment's 10-year life

The debtor exam becomes even more important in this environment. Without knowing the debtor's actual financial position, you're guessing — and the filing fees for failed enforcement attempts add up.

Hardship Reductions

Even the 10% wage garnishment ceiling can be reduced for hardship. Arizona courts' Proposition 209 guidance says a court may reduce a 10% garnishment to 5% if the debtor proves extreme economic hardship by clear and convincing evidence; it does not authorize a complete stay on that basis.

Filing Smart

None of this means collection is impossible — it means you need to be strategic. Run the numbers against these exemption thresholds before each filing. Focus enforcement on assets that clearly exceed the protected amounts. And start with the debtor examination so you have real numbers to work with instead of assumptions.

Get the complete Arizona judgment collection guide with a Proposition 209 feasibility calculator that screens every enforcement tool against current exemption limits before you file.

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