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 more 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 can keep all of your clothing under Arkansas law. Ark. Const. art. IX, §§ 1 and 2).
Other Personal Property
While Arkansas does have a bankruptcy exemption statute on the books, which delineates various exemption amounts for certain types of personal property (see Ark. Code Ann. § 16-66-218 ), in 1990 the Eight Circuit Court of Appeals declared this statute unconstitutional as it relates to personal property. In re Holt, 894 F.2d 1005 (8th Cir. 1990). The court reasoned that because Arkansas has a constitutional provision which allows debtors to exempt up to $200 of all of their personal property ($500 if married) (see Ark. Const. art. IX, §§ 1 and 2), this provision acted as a cap. The bankruptcy exemption statute (which allows for more generous exemption amounts) conflictswith the Constitution and is therefore unconstitutional.
These caps apply to all of your personal property. So, for example, if you are single and use $200 to exempt car equity, you'll have nothing left for your piano.
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.