Because bankruptcy is a system of federal law, the steps to file for Chapter 7 bankruptcy or to file for Chapter 13 bankruptcy are nearly identical in every state, including Arkansas. However, Arkansas state laws are still important, particularly in setting property exemptions, which determine what property you get to keep (if you file for Chapter 7) and how much you have to repay your creditors (if you file for Chapter 13). There are also important resources available to you by state.
Credit Counseling in Arkansas
Before you file for Chapter 7 or Chapter 13 bankruptcy in Arkansas, you will have to complete mandatory credit counseling with an agency that’s been approved by the United States Trustee’s Office. Here’s a list of agencies in Arkansas that have been approved to provide this counseling.
Where to File for Bankruptcy in Arkansas
Arkansas has its main bankruptcy court in Little Rock, with a divisional office in Fayetteville. At the court’s website, you can find information on forms, local rules, and more.
Like every other state, Arkansas has a set of property exemptions. (To learn more about how property exemptions work generally and which exemptions you may use, see Bankruptcy Exemptions: What Do I Keep When I File for Bankruptcy?)
In Arkansas, you may either use the state’s exemption list or the list of federal bankruptcy exemptions. You must choose one list or the other; you can't mix and match exemptions from both lists.
Arnkansas bankruptcy filers that are homeowners usually choose the state list: Arkansas allows debtors to exempt an unlimited amount of home equity, up to 1/4 acre of real estate in a city, town, or village, or up to 80 acres elsewhere. Here’s the whole list of Arkansas exemptions.
If you don't own a home, then the federal exemptions are probably more advantageous to you.
The Means Test
When you file for bankruptcy, you must compare your income to the median income for a household of your size in Arkansas. If your income is less than the median, you will be eligible to file for Chapter 7 and, if you choose to file for Chapter 13, you can use a three-year repayment plan (rather than five years).
Currently, the median income for a one-person household in Arkansas is over $34,000; these figures change periodically. You can find the most recent amounts on the website of the U.S. Trustee at www.justice.gov/ust. Click on “Bankruptcy Reform,” and then “Means Testing Information.” Or go directly to the Census Bureau table here.
Arkansas Debtor Education
After you file your bankruptcy forms but before you receive your discharge, you must take a debtor education course. Like the mandatory credit counseling you must take before filing your forms, you must receive debtor education from an agency approved by the U.S. Trustee’s Office. Here a list of agencies approved to provide this course in Arkansas.
Finding a Bankruptcy Lawyer
If you're considering bankruptcy, you may want to talk to an experienced Arkansas bankruptcy lawyer.