If you file for Chapter 7 bankruptcy in Arkansas, you can protect some or all of your property with Arkansas’ bankruptcy exemptions. The bankruptcy exemptions in Arkansas also play a role in Chapter 13 bankruptcy. Read on to learn about the property you can protect with Arkansas’ bankruptcy exemptions.
For a general overview of bankruptcy exemptions, visit the Bankruptcy Exemption topic page.
Arkansas Allows Debtors to Choose Between State and Federal Exemptions
Arkansas is one of the states that allow debtors to choose between the Arkansas exemptions and the federal bankruptcy exemptions. This means that you may review both sets of exemptions and pick the exemptions that better protect your assets.
Married Couples May Double Arkansas Exemptions
Married couples filing a joint bankruptcy in Arkansas may double the exemption amounts (except for the homestead exemption). This means that each spouse may claim the full exemption amount for any property in which the spouse has ownership interest. For example, if both spouses own an item and they file jointly, they can double the amount of the applicable exemption to protect that item’s value.
Common Arkansas Exemptions
Here are some of the most common exemptions available under Arkansas law. Unless otherwise indicated, all references are to the Arkansas Code Annotated or the Arkansas Constitution.
Homestead or Residential Property
The homestead exemption protects equity in real property that you use as your residence. In Arkansas, you can choose between two state homestead exemption options.
Option A: If you are a married person or head of family, you can protect unlimited equity in up to ¼ acre in a city, town, or village, or 80 to 160 acres elsewhere, plus up to $2,500 in additional equity for homesteads between ¼ and 1 acre. Your homestead may not exceed 1 acre in a city, town, or village or 160 acres elsewhere, and you and your spouse may not double the homestead exemption. Ark. Code Ann. §16-66-210
Option B (available only in bankruptcy): If unmarried, you may protect up to $800 of equity in real or personal property in which you or your dependent lives. If you are married, you may protect up to $1,250 of equity real or personal property in which you or your dependent live. If you don’t use the homestead exemption, you may exempt a burial plot for you or your dependent. Ark. Code Ann. §16-66-218(a)(1)
For more details about how the homestead exemption works in Arkansas, see The Arkansas Homestead Exemption.
You may exempt the following personal property:
Burial plot up to 5 acres, if using Option A (Ark. Code Ann. §16-66-218) of the homestead exemption or no homestead exemption at all. Ark. Code Ann. §16-66-207
Prepaid funeral trusts. Ark. Code Ann. §23-40-117
Wedding rings. Ark. Code Ann. §16-66-219
In Arkansas, you can exempt up to $1,200 in equity in your car or other vehicle. Ark. Code Ann. §16-66-218
Example. Ed owns a 2006 Honda Civic. His car is worth $7,000 and he owes the dealership $6,000, so he has $1,000 of equity in the car. If Ed files Chapter 7 bankruptcy in Arkansas, he can protect all of the equity in his car using the motor vehicle exemption.
To learn more about the Arkansas Motor Vehicle exemption, visit The Arkansas Motor Vehicle Exemption in Bankruptcy.
Insurance Benefits and Proceeds
Annuity contract. Ark. Code Ann. §23-79-134
Group life insurance. Ark. Code Ann. §23-79-132
Disability benefits. Ark. Code Ann. §23-79-133
Life insurance proceeds. Ark. Code Ann. §23-79-131
Pension benefits and domestic support.
Police officers. Ark. Code Ann. §24-10-616
State police officers. Ark. Code Ann. §24-6-205, §24-6-223
School employees. Ark. Code Ann. §24-7-715
Disabled police officers. Ark. Code Ann. §24-11-417
Disabled firefighters. Ark. Code Ann. §24-11-814
IRA deposits up to $20,000 if deposited within the last tax year before filing for bankruptcy. Ark. Code Ann. §16-66-218(b)(16)
Tools of the Trade
Up to $750 of equity in books, tools, and implements of trade or business. Ark. Code Ann. §16-66-218(a)(4)
Up to $500 of any personal property if married or head of family; $200 if unmarried. Ark. Code Ann. §16-66-218(b)(1) & (2)
Unemployment compensation. Ark. Code Ann. §11-10-109
Workers’ compensation. Ark. Code Ann. §11-9-110
Confirming the Arkansas Bankruptcy Exemptions
This list includes some of the more commonly used Arkansas bankruptcy exemptions, but there are numerous other exemptions available to protect specific property. Additionally, Arkansas updates its exemptions periodically. You can verify the current exemption amounts at the website of the Arkansas Legislature. To learn how to do this, see Nolo’s Legal Research Center.