Arkansas Bankruptcy Exemptions

Updated December 17, 2018

Like all states, Arkansas has exemption laws you can use to protect property in Chapter 7 or Chapter 13 bankruptcy. Exemption laws tell you the type of property you can keep. What will happen to property you can’t protect with an exemption will depend on the chapter you file:

  • Chapter 7 bankruptcy. The bankruptcy trustee will sell nonexempt property and distribute the proceeds to creditors.
  • Chapter 13 bankruptcy. You’ll keep everything you own in this chapter. The catch is that you’ll have to pay at least the value of the nonexempt property equity—more if you have a significant disposable income remaining after paying qualifying monthly bills.

If you’re not sure which type of bankruptcy is best for you, try reading When Is Chapter 7 Bankruptcy Better Than Chapter 13?

Using Arkansas State Exemptions or Federal Exemptions

Some states allow debtors to choose between the state exemption system and a set of federal bankruptcy exemptions. In Arkansas, you can use either the Arkansas state exemptions listed below, or the federal bankruptcy exemptions, but you can’t choose from each list.

To learn more about bankruptcy exemptions, including how they work, which state exemption system you should use, and special rules for the homestead exemption, see Bankruptcy Exemptions – What Can I Keep When I File for Bankruptcy?

Arkansas Bankruptcy Exemptions

Here’s a sampling of some of the most commonly used Arkansas exemptions. Unless noted otherwise, a married couple filing jointly in Arkansas can “double” the full amount if both have an ownership interest in the property.

All law references are to the Arkansas Code Annotated. Filers using the Arkansas state exemptions can also use the federal nonbankruptcy exemptions.

Arkansas Homestead Exemption (Choose A or B, Not Both)

A. 16-66-210 - Married people or the head of the family can claim real or personal property used as a residence up to 1/4 acre in a city, town, or village or up to 80 acres elsewhere. You can have up to one acre in a city, town, or village, or up to 160 acres elsewhere, as long as the equity doesn’t exceed $2,500. Spouses can’t double these amounts.

B. 16-66-218 - Real or personal property used as a residence, up to $800 if single or $1,250 if married.

Pension Exemptions

11 U.S.C. § 522 - 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)(n) - IRAS and Roth IRAs to a certain amount set by federal law.

16-66-220 - Pension or retirement account up to $20,000.

Public Benefits

11-9-110 - Workers' compensation.

11-10-109 - Unemployment compensation.

16-90-716 - Crime victims' compensation.

Other Personal Property

You can keep all of your clothing under Arkansas law. (Ark. Const. Art. IX, § § 1 and 2). All other personal property is subject to a cap of $200 for single filers and $500 for married filers.

While Arkansas does have other bankruptcy exemption statutes on the books, the Eight Circuit Court of Appeals declared such statutes unconstitutional as it relates to personal property because it conflicts with the $200/$500 exemption amount in Ark. Const. Art. IX, § § 1 and 2.

You’ll want to speak with a local Arkansas bankruptcy attorney to verify the amount of property you’ll be able to protect.

Confirming Exemptions

This is a partial list of exemptions available in Arkansas. If you make an exemption mistake, it’s unlikely that the court will allow you to dismiss your case if you file for Chapter 7 bankruptcy. Therefore, it’s essential to understand that:

  • this article doesn’t include all Arkansas exemptions
  • requirements you might need to meet aren’t included, and
  • the dollar amounts might have changed since this article was last updated.

You’ll want to confirm exemption availability with a local bankruptcy attorney. For more information, see Filing for Bankruptcy in Arkansas.

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