Arkansas Bankruptcy Laws
The process of going through bankruptcy is protected by federal and state laws. These laws are not the same in every state and can be rather complex. Prior to making a decision about bankruptcy, make sure you know all the facts about how the laws will apply to you. You can find answers by speaking with a local bankruptcy lawyer. Get a free case evaluation with an attorney in your area when you fill out the free form on this page.
Consumers in the state of Arkansas who are in debt may consider filling bankruptcy as a way to deal with the debt problem.
Arkansas Bankruptcy Exemptions
In the state of Arkansas, you must choose between one of two exemption schemes, either the state plan or the federal plan. Under federal bankruptcy laws, the following items are exempt:
- Your home, up to $20,200
- Life insurance payments from an individual you depended on
- Life insurance policy with a loan value to $10,775
- Unmatured life insurance, excluding credit life insurance policies
- Alimony or child support payments
- Pensions and certain retirement benefits
- Up to $10,775 in household goods ($575 per item)
- Up to $3,225 for a vehicle
- Up to $20,200 for payments for personal injury, public assistance, victims’ compensation, and other categories
- Necessary health aids
- Payments from lost earnings
- Up to $1350 for jewelry
- Up to $2,025 for tools of the trade
- $1,075 of any property plus up to $10,125 of unused homestead exemption amount
For those who choose federal exemptions, married couples can double the exemptions in each category. Those who choose Arkansas bankruptcy laws must have lived in the state for two years before filing bankruptcy. Arkansas exemptions include:
- Residence, provided value does not exceed $2,500. Land size stipulations apply
- Clothing for the family
- Up to $750 for tools of the trade
- For single filers, $200 of any personal property. For married couples, $500 for any personal property
- Up to $1,000 for life and disability insurance
- Up to $20,000 in IRA contributions made over a year before filing
- Sixty days of unpaid but earned wages
- Public benefits
Arkansas Chapter 7 Bankruptcy Law
Those who pass the means test, which means they make less than the median income in their area, can file for Chapter 7 bankruptcy. This gives the courts the ability to sell non-exempt assets, pay off the creditors and wipe out any remaining debt.
Arkansas Chapter 13 Bankruptcy Law
Those who do not pass the means test or who have non-exempt assets they wish to try to protect may file Chapter 13 bankruptcy. Under Chapter 13, the debtor works with a trustee to pay down the debts on a new three to five year repayment plan.
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