If you file for bankruptcy in Arkansas, the Arkansas homestead exemption protects equity in your home. Arkansas offers two homestead exemption options. Depending on which option you choose and how much land you own, you may be able to protect your entire home, or as little as $800 in your home. Read on to learn more about the Arkansas homestead exemption.
For information about how the homestead exemption works in both Chapter 7 and Chapter 13 bankruptcy, see The Homestead Exemption in Bankruptcy. For more articles on exemptions, see our Bankruptcy Exemptions area.
The Arkansas Homestead Exemption Amount
In Arkansas, homeowners must choose between two different homestead exemption options.
Under the first option, a married person or the head of a family may exempt an unlimited amount of value in his or her home or other property covered by the homestead exemption if the property is ¼ acre or less in a city, town, or village, or 80 acres or less anywhere else. If the property is between ¼ acre and 1 acre in a city, town, or village, or between 80 acres and 160 acres elsewhere, then the homestead exemption is $2,500. Further, homesteads may not be larger than 1 acre in a city, town, or village, or over 160 acres anywhere else.
Under the second option, homeowners may exempt $800 in their home or other property covered by the homestead exemption if they are single, or $1,250 if they are married.
Doubling for Married Couples
Certain states allow married couples to double the amount of their homestead exemption. However, Arkansas is not one of these states. So if you are married, you cannot double the amount of the homestead exemption in Arkansas.
(To learn about the advantages and disadvantages of joint bankruptcy filings, see Nolo's section on Bankruptcy Options for Married Couples).
The Scope of the Arkansas Homestead Exemption
In Arkansas the homestead exemption applies to real property, including your home and condominium, as well as personal property as long as the property (real or otherwise) is used as your residence.
Can You Use the Federal Bankruptcy Exemptions in Arkansas?
In Arkansas you can use either the state exemption system or the federal bankruptcy exemption system (but you can’t pick and choose different exemptions from each system – you have to use all state exemptions or all federal exemptions.)
The federal bankruptcy homestead exemption amount is $21,625. The exemption may be used for homes, condos, co-ops, mobile homes, and burial plots. Married couples may double this exemption. You can find the federal bankruptcy homestead exemption at 11 U.S.C. §522(d)(1)and (5).
(To learn more about which state exemptions apply to you, see Which Exemptions Can You Use in Bankruptcy?)
In Arkansas the homestead exemption is automatic – you don’t have to file a homestead declaration in order to claim the homestead exemption in bankruptcy.
Real Property Held as Tenancy in the Entirety in Arkansas
If property is held as a tenancy in the entirety, it means the property is jointly owned by a married couple as a single marital entity, not as individuals. In some states, tenancies in the entirety are exempt from individual creditors of one spouse and usually can only be taken to satisfy joint debts.
In Arkansas property can be held as a tenancy in the entirety but the debtor spouse’s interest is not exempt. So one spouse’s interest can be taken and sold in bankruptcy to satisfy his or her creditors.
Finding the Arkansas Homestead Exemption Statute
Arkansas’ homestead exemption is found in the Arkansas Constitution Article 9, §§ 3-5 and Arkansas state statutes at Arkansas Code Annotated § 16-66-210, § 16-66-218 (a)(1), § 16-66-218 (b)(3),(4). To learn how to find state statutes, see Nolo’s Laws and Legal Research area.