Filing Bankruptcy In Arkansas

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Whether because of an illness, lose of job, or other major setback, bankruptcy is sometimes inevitable for individuals, households, or businesses in Arkansas. The entire process is a major undertaking and should never be approached without sound legal counsel. When forced into filing for bankruptcy there are many things to take into account. There are a few different forms of Bankruptcy in Arkansas for everyone’s circumstances, each with positives and negatives. However, for all bankruptcy filings, once filed creditors may no longer continue active collections actions. Bankruptcy can help individuals get back to financial freedom quicker. Nevertheless, the process leaves a notable blemish on one’s financial record for at least ten (10) years into the future.

Arkansas Bankruptcy Topics

  1. Personal Bankruptcy Options
  2. Keep Your Home: Bankruptcy and Foreclosure
  3. Arkansas Exemptions to Bankruptcy Liquidation
  4. Options for Filing Bankruptcy
  5. Local Bankruptcy Courts and Trustees

Personal Bankruptcy in Arkansas

Although individuals may file under several chapters of the bankruptcy code, in Arkansas individuals and households have one of two choices in an overwhelming majority of instances. They may file under Chapter 7 or Chapter 13 pending the overall outlook of their financial situation

Chapter 7 Bankruptcy

In Arkansas, those who wish to file for ‘liquidation’ or a ‘fresh start’ bankruptcy, there are two variations. After passing the means test, filers must chose from one of two exemption schemes. For businesses, however there is only one option. The two variations are for differentiating between individuals and married persons. Any way it comes, Chapter 7 bankruptcy results in all assets aside from those exempt being placed in the control of the bankruptcy trustee. The trustee liquidates them and pays back the creditors. Exemptions are the items debtors are able to keep after filing for bankruptcy.

The means test is passed by qualifying to be under the median income for the given state. In this case, the median income in Arkansas is $33,623 for an individual, $45,435 for married persons, $48,909 for three persons, $56,822 for four person households and an additional $6,900 for each member over four. In Arkansas, Chapter 7 bankruptcy does not exempt the debtor from recent purchases over $550, government fines, or cash advances of $825 of more.

Chapter 13 Bankruptcy

Arkansas’ Chapter 13 bankruptcy laws are in essence the same as any other state. Chapter 13 bankruptcy is a ‘wage earners’ bankruptcy. The process is designed to help people who are falling into debt recover as quickly and effectively as possible, while satisfying their creditors. With the help of the bankruptcy trustee, a plan is created to repay all debts to creditors. Debtors are able to keep all possessions using this method of bankruptcy. Those who can qualify must have less than $1,010,650 in secured debt and less than $336,900 in unsecured debt. Repayment plans under Chapter 13 bankruptcy must be made for three (3) to five (5) years. Amendments and extensions can be made to the plan, but must be approved by the bankruptcy court. (See more on Filing Chapter 13 in Arkansas).

Filing Bankruptcy during Foreclosure

Upon filing for bankruptcy, the debtor is freed by law from the actions of creditors to regain debt from them. This applies to homeownership in stopping foreclosures. Once the bankruptcy is filed, a creditor must gain permission from the bankruptcy court to regain any of its debt from the debtor. Bankruptcy cannot stop a foreclosure that is already in action. If the home may lose significant value during the bankruptcy process, a foreclosure may be inevitable. Chapter 13 Bankruptcy may still be useful with its ability to void second or third mortgages in some cases.

Arkansas Bankruptcy Exemptions

In the state of Arkansas, debtors may claim exemptions under the state exemptions list or the federal exemptions list.  Exemptions specifically allotted in the Arkansas state exemptions list include:

Type of Asset(s)

Details on Applicable Exemption(s)


Real estate property used as residence is exempt for head of family, all other property is exempt up to only $2,500.  Individuals real property used as residence is exempt up to $800, with $1250 allotted for couples.


Life, accident, health, or disability benefits are exempt


Life insurance benefits from parent, if individual claiming exemptions is child or spouse.


Annuity contracts are exempt, as well as stipulated insurance premiums.

Pension Benefits

Pension benefits of law enforcement officers, judges, teachers, and other state servants are exempt.


Tax-exempt retirement accounts, including traditional and Roth IRAs up to $1,095,000 per person with IRA deposits up to $20,000 if deposited over 1 year before filing for bankruptcy are exempt.

Public Benefits

Workers compensation benefits, unemployment benefits, and crime victim’s assistance are exempt assets.


Earned but unpaid wages due for 60 days, but in not less than $25 per week.


All Federal Non-bankruptcy Exemptions / Federal Non-Exempt Bankruptcy Exemptions are exempt assets in Arkansas bankruptcy filings.


Arkansas Bankruptcy Filing Options

  • Use a Bankruptcy Lawyer - It will be very advantageous for the individual or married couple to hire a bankruptcy lawyer. Bankruptcy lawyers are trained professionals and are able to guide the debtor accurately through the entire process. They will even be of assistance in meetings and court dates for moral support with the debtor knowing they are doing the right things.
  • Use a Filing Service - For those with complex finances or business owners with a large quantity of paperwork, a filing service may be very useful. Though they do not provide any legal advice, they provide more than just time saved from paper work. One has the knowledge that their paperwork is being filed correctly. However, if mistakes were made by the debtor on assessing their property, problems can arise with bankruptcy fraud. This method will also cost the debtor money.  Using a filing service in combination with an attorney is probably the most beneficial method.
  • File “Pro Se” - If a debtor has little or no extra money left after filing for bankruptcy filing, Pro Se might be inevitable. To file for bankruptcy one must pay court and other miscellaneous costs, leaving them with very small funds. Filing Pro Se is to file on one’s own. To do this is a major undertaking in time and risk. The majority of individuals do not know the ins and outs of bankruptcy laws as professionals do.

Courts and Arkansas Bankruptcy Trustee Information

Arkansas Middle Bankruptcy Court Main Office

Old United States Post Office and Courthouse
300 West Second Street
Little Rock, AR 72201

Arkansas Bankruptcy Court Fayetteville Office

316 John Paul Hammerschmidt Federal Bldg
35 East Mountain Street
Fayetteville, AR 72701