File Bankruptcy in Arkansas

In Arkansas, you can apply for both Chapter 7 and Chapter 13 Bankruptcy as an individual consumer.

Bankruptcy in Arkansas does not discharge some debts, including most back taxes, child support, alimony, most student loans, penalties or fines, and purchases greater than $550 made within 90 days of filing bankruptcy, or cash advances greater than $825 made within 70 days of filing bankruptcy.

To file for Chapter 7 bankruptcy in Arkansas and have your debts erased, you must pass a means test. Under the test, if you make less than the median income for an Arkansas family, you may file under Chapter 7. For singles, the median income in Arkansas is $32,534. $41,760 is the median income for a family of two, $48,943 for three persons, and $53,671 for four persons. If there are more than four members of your family, add $6,900 for each additional person.

Before you file Chapter 7 bankruptcy in Arkansas you will need to undergo credit counseling approved by the state, as well as complete any unfiled tax returns.

Once you meet the minimum requirements, your attorney will need to file a Statement of Financial Affairs with your local Arkansas Court. Your Statement of Financial Affairs will include a list of all your debts, both secured (such as mortgages or car loans) and unsecured (such as credit cards and medical bills). You will also need to include names and contact information for all your creditors and an itemized list of your personal property and assets.

In Arkansas, you may choose from two “exemption schemes” when filing Chapter 7 bankruptcy: the Federal scheme or Arkansas state scheme. To file under the state scheme, you must have resided in Arkansas no less than 730 days prior to filing bankruptcy. 
Under the Federal scheme, you may exempt your house or mobile home up to $20,200. Pursuant to the Arkansas state scheme, you may exempt it to $2,500.

Under the Federal exemption scheme, you may exempt your automobile up to $3,225. Under the Arkansas state scheme, the limit is $1,200. Regardless of which scheme you choose, you must reaffirm any auto loans after filing bankruptcy.

Under the Federal exemption, you also keep: alimony, child support, and most life insurance; retirement benefits and pensions; household goods valued at no more than $525 each, with a total value not to exceed $10,775; jewelry valued up to $1,350; necessary health aids; public assistance, social security, and veterans’ benefits. You are also given a $1,075 “wild card” exemption under the federal scheme.

Under the Arkansas exemption scheme, you can keep the following: clothing; property valued up to $200 if you are single and $500 if you are married; tools of trade valued up to $750; public assistance, worker’s compensation, and unemployment benefits. You may also keep up to $1,000 in life and disability insurance, as well as any IRA contributions made up to a year before filing bankruptcy, valued up to $20,000. You may also exempt up to sixty days worth of earned wages that are due to you.

If you have extra income that would allow you to repay your debts, you may want to file Chapter 13 bankruptcy. When you file Chapter 13 bankruptcy in Arkansas, you will establish a payment plan with the approval of the court.