May 29, 2019
When you’re having difficulty making ends meet, filing for bankruptcy in Arkansas can be a good solution. But finding the information needed to complete the petition can be challenging.
In this article, you’ll learn where to find:
- the law that allows you to protect property in an Arkansas bankruptcy
- official bankruptcy forms
- Arkansas means test figures (for qualification purposes)
- required course providers, and
- your local bankruptcy court.
If you’re just getting started, you’ll need to decide whether you’re better off filing for Chapter 7 or Chapter 13 bankruptcy. Then you’ll be ready to fill out your bankruptcy paperwork and file it the federal bankruptcy court.
Arkansas Bankruptcy Information
Federal law governs bankruptcy filings, but some aspects of Arkansas law and procedure will also come into play.
Arkansas Bankruptcy Exemptions
Filing for bankruptcy doesn’t mean you’ll lose everything. But it doesn’t necessarily mean you’ll get to exempt (keep) all of your property, either.
You’ll be able to protect any property that appears on the list of Arkansas exemptions or the federal bankruptcy exemptions list. As an Arkansas resident, you’ll pick the list that will work best for you, but you can’t pick and choose individual exemptions from both lists. If you use the Arkansas list, you’ll be able to use federal nonbankruptcy exemptions, too.
What will happen to nonexempt property will depend on the chapter you file:
- In a Chapter 7 bankruptcy, the trustee appointed to manage your matter will sell any property that doesn’t appear on the exemption list for the benefit of your creditors.
- By contrast, you can keep all of your property in a Chapter 13 bankruptcy. But, there’s a catch. You must pay the nonexempt property value to your creditors through the three- to five-year Chapter 13 repayment plan.
Here are the more common exemptions available under Arkansas law. Spouses filing bankruptcy together in Arkansas can double the exemption amount if they both own the property (except for the homestead exemption).
Arkansas Homestead Exemption
You have two options when it comes to protecting homestead or residential property. You can choose system A or B. but not both.
- A: Unlimited amount of equity in 80 rural acres or one-quarter urban acre. If the land isn’t worth $2,500, you can increase the acreage up to 160 rural acres and one urban acre, up to a total equity value of $2,500 in value.
- B: Real or personal property used as a residence up to $800 if single or $1,250 if married. (Ark. Const. Art. 9 §§ 3, 4, 5, 6; Ark. Code Ann. §§ 16-66-210, 212, 218).
Arkansas Motor Vehicle Exemption
You can protect the equity in a motor vehicle up to $1,200 (Ark. Code Ann. § 16-66-218.)
Arkansas Wildcard Exemption
You can protect any property of your choosing up to $500 if you're married or the head of the family, or $200 otherwise (Ark. Const. § 9-1, 9-2.)
Other Arkansas Bankruptcy Exemptions
- Personal property. All clothing; a single person who is not the head of the family can keep $200 worth of any other type of property. The amount increases up to $500 for a married person or head of the family. (Ark. Const. Art. 9 §§ 1 and 2, Ark. Code Ann. § 16-66-218; tools needed in your trade or profession up to $750 (Ark. Code Ann. § 16-66-218); wedding bands (Ark. Code Ann. §§ 16-66-218, 219); life, health, and disability insurance payments (Ark. Code Ann. § 16-66-209); pension or retirement account up to $20,000 (Ark. Code Ann. § 16-66-220).
- Tax-exempt retirement accounts. Including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined-benefit plans (11 U.S.C. § 522(b)(3)(C).) Learn more about retirement accounts in bankruptcy.
- Public benefits. Workers' compensation (Ark. Code Ann. § 11-9-110); unemployment compensation (Ark. Code Ann. § 11-10-109); crime victims' compensation (Ark. Code Ann. § 16-90-716).
- Tools of the trade. Implements and books used in your profession up to $750 (Ark. Code Ann. § 16-66-218(a)(4).
Additional exemptions exist, and Arkansas updates exemption amounts periodically. Check the Arkansas statutes on the Arkansas State Legislature website to make sure you are using all exemptions available or meet with a local bankruptcy lawyer. References are to the Arkansas Code Annotated or the Arkansas Constitution.
Arkansas Means Testing and Credit Counseling Information
You can find two types of Arkansas-specific information on the website of the U.S. Trustee: means testing figures and approved course providers.
- Means test data. You’ll be entitled to a Chapter 7 bankruptcy discharge if you meet income guidelines and pass the “means test.” A gross family income below the Arkansas median income for a family of the same size will pass. If it’s above the median, you still might pass after deducting allowed expenses. You’ll find the income charts and expense figures on the U.S. Trustee’s website under “Means Testing Information.” You’ll do similar calculations to determine a Chapter 13 bankruptcy payment. (Find out more by reading What Is a Chapter 13 Bankruptcy Plan?)
- Certificate providers. Most filers must complete a session with a credit counseling service before filing for bankruptcy and a debt management course before receiving a discharge. You’ll find approved providers under “Credit Counseling & Debtor Education.” (Scroll down to the District of Arkansas.)
Bankruptcy Costs, Filing Fees, and Forms
Most people have to pay some amount to file for bankruptcy, but it’s usually worth the cost. Here’s what you can expect.
- Official bankruptcy forms. Before the Arizona bankruptcy court wipes out qualifying debt, you must disclose all aspects of your financial situation—income, expenses, property, debt, and property transactions—on official bankruptcy forms. These forms are free. After filling out the bankruptcy forms online on the U.S. Bankruptcy Court forms webpage, you’ll file your paperwork in your local bankruptcy court (more below) along with a filing fee or fee waiver.
- Bankruptcy filing fees or fee waiver. You’ll pay a filing fee when you file your paperwork with the court unless you qualify for a fee waiver. Find out about both in Bankruptcy Filing Fees and Costs.
- Bankruptcy lawyer fees. The cost to hire a lawyer varies depending on the area. Find out the benefits of being represented by an attorney.
Arkansas Bankruptcy Court Website and Locations
Arkansas has two districts—the Eastern and Western districts—and several divisions within those districts. To determine where to file, go to “Court Information” and click on “Arkansas Map-County Codes-Case Numbering.”
Also, keep in mind that each court creates its own rules that you must follow, and some might have local forms, too. You’ll find the court’s local rules and instructions for filing your paperwork on the Arkansas bankruptcy court website by clicking on “Filing Information” on the navbar.
Eastern District of Arkansas
Western District of Arkansas
|U.S. Bankruptcy Courthouse
300 West 2nd Street
Little Rock, AR 72201
|Divisional OfficeFederal Building Room 31635 E. Mountain StreetFayetteville, AR 72701(479) 582-9800
This article provides resources that will help a filer find some of the information needed to prepare a bankruptcy filing; however, each filer is responsible for understanding the law. A do-it-yourself book like How to File Chapter 7 Bankruptcy by Attorney Cara O’Neill and Albin Renauer J.D. can help you make important decisions in your case.