PHOENIX — It takes less time for Mary Drummond to list the states she and her husband haven’t been to in their motorhome than to list the ones they have.
“We probably haven't been through maybe 10 states,” Mary said. “So we've probably been through 38.”
The 2017 Tiffin RV was a home for the couple from the time they bought it in 2018. It was their only residence. A place not just to go on adventures from, but to live in full time. At least until the Arizona State Supreme Court decided this February that, legally, it wasn’t their home. Motorhomes – despite the name – were vehicles, the court decided. Not homes. Not by legal definition.
This is relevant not just for the Drummonds, who filed for bankruptcy in 2022, but it's a massive change to Arizona bankruptcy law — and the safety people in Arizona bankruptcy proceedings could find in motorhomes.
The Drummonds have lost their home. So could the next person in Arizona who declares bankruptcy while living solely in an RV.
This goes back to something called “the homestead exemption,” and the idea that you shouldn’t lose your home if you’re going through bankruptcy. The exemption protects the value of a home, up to a certain dollar amount, from being seized by creditors.
“In Arizona, we have a very good homestead protection law that protects your residence,” said Kenn Neeley, Arizona consumer bankruptcy attorney, who was not part of the Drummonds' case.
When the Drummonds filed their bankruptcy case in Arizona, they claimed two primary assets: a 20212 Nissan and a 2017 motorhome – their home.
Arizona’s homestead exemption protects a house. It protects a mobile home.
“So the question in this case was whether or not the motorhome, which the Drummonds owned, was the same thing as a mobile home,” said Arizona bankruptcy attorney Terry Dake.
Dake was directly involved in the Drummonds’ case, representing the trustee, the person or group whose duty it is to dole out a person’s assets to their creditors.
“The trustee just didn't feel that the statute provided for an exemption for a motorhome under the definition of mobile home,” Dake told 12News.
The 2017 Tiffin might have been the Drummonds’ home. But it might not qualify for protections under Arizona’s homestead exemption.
The state supreme court agreed to review the case, at Dake’s request.
The answer for the Drummonds was not good.
AZ Supreme Court: A motorhome does not qualify for the Arizona homestead exemption
Arizona Supreme Court issued its decision in February:
“We answer the certified question by holding that a motor home in which a person over 18 years of age resides does not qualify for the Arizona homestead exemption under A.R.S. § 33-1101(A)(3),” the majority opinion stated.
The 6-1 ruling caused a fundamental shift for consumer advocates like Neeley.
“I'll say we have filed cases in the past where we protected the motorhome with the homestead exemption,” Neeley said. “And in these cases, it's clear that these debtors are using their motorhomes as homes. They're not trying to game the system. They live in their motorhome.”
Prior cases did allow for a motorhome to be protected as a home, but those cases were not challenged before the state supreme court.
“The majority finds that “mobile home” in (statute) plainly refers to ‘a dwelling that is not intended to be moved once placed and physically attached to property,’” the majority wrote. “As such, my colleagues conclude the term cannot include a self-propelled motor home because it is ‘intended to be readily movable and is not tied to the land upon which it sits in any significant way.’”
The role of the RV doesn’t matter, the court decided. The fact that it rolls does.
“I think they missed the entire point,” Drummond said. “Just because you live in an RV doesn't mean you're homeless, it just means you're houseless.”
In her dissent, Vice Chief Justice Ann Scott Timmer said “This Court has consistently found that the purpose of the homestead exemption is to ensure that ‘individuals whose property is subject to foreclosure are not rendered homeless.’”
She added: “In other words, whether or not a home has a motor, the homestead exemption fulfills its purpose by protecting the family’s interest in that home.”
The majority opinion stated that any changes to the exemption would need to come from the legislature.
Will the legislature change the law?
Arizona has recently passed more protections for people in debt, including a voter initiative, Proposition 209, passed in 2022. That added protections for people in debt in regards to wage garnishments, interest rates on medical debt and increased bankruptcy protections.
It’s unclear whether a change to protect motorhomes would have widespread support, or may include specifications like a minimum amount of time the vehicle has to be in Arizona, titled and registered in the state.
New bills might be introduced in the future. But for the Drummonds, it's too late.
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