Filing for Bankruptcy in Arkansas

Updated December 17, 2018

Bankruptcy is governed by federal law so the steps for filing for Chapter 7 bankruptcy or filing for Chapter 13 bankruptcy are nearly identical in every state, including Arkansas. However, Arkansas state law plays an important role, too. You’ll use it when:

  • protecting property with the Arkansas exemption laws
  • qualifying for a Chapter 7 discharge, and
  • drafting a Chapter 13 repayment plan.

This article will help you find the information needed when filing an Arkansas bankruptcy. For help determining the best bankruptcy chapter type for you, start with When Is Chapter 7 Bankruptcy Better Than Chapter 13?

Qualifying for an Arkansas Bankruptcy—The Means Test

When you file for bankruptcy, you must compare your income to the Arkansas median income for a household of your size. If your income is less than the median, you’ll be eligible to file for Chapter 7. Also, if you choose to file for Chapter 13, you can use a three-year repayment plan rather than a five-year plan.

If your income is above the state median, you’ll likely file for Chapter 13 and use a similar calculation to determine what you’ll pay in a monthly plan payment.

The median income figures change regularly. The most recent amounts are on the U.S. Trustee website. Click “Means Testing Information.”

Protecting Arkansas Property With Exemptions

Like every other state, Arkansas has a set of property exemptions that tell you what property you can protect in bankruptcy. Most sets allow you to keep some equity in a home and modest car, household furniture, clothing, a retirement account, and more. For instance, here are some exemption terms you’ll want to know:

  • Homestead exemption. A homestead exemption protects equity in a residential property.
  • Motor vehicle exemption. This exemption allows you to protect equity in a car, or sometimes a motorcycle.
  • Wildcard exemption. A wildcard exemption lets you keep any property you’d like, but not all states have wildcard exemptions.
  • Federal exemption. This term refers to the exemptions allowed under federal law rather than state law. Some states allow residents to choose between the federal and state exemption lists. You can find a list of federal exemptions here.

In Arkansas, you can use either Arkansas exemptions or federal exemptions but you can't mix exemptions from both lists. You must pick one list or the other.

The Arkansas Homestead Exemption

Arkansas bankruptcy filers who own a home often 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.

The federal exemptions might be more advantageous to you if you don’t own a home. To learn more about how property exemptions work, see Bankruptcy Exemptions: What Do I Keep When I File for Bankruptcy?

Arkansas Credit Counseling and Debtor Education

Before you file for Chapter 7 or Chapter 13 bankruptcy in Arkansas, you’ll have to complete mandatory credit counseling with an agency approved by the United States Trustee’s Office. Also, you must take a debtor education course after you file your bankruptcy forms. If you don’t file completion certificates, your case will be dismissed and you won’t receive your discharge.

Go to the U.S. Trustee website, select “Credit Counseling & Debtor Education” and scroll down to the Arkansas section for approved providers.

Where to File for Bankruptcy in Arkansas

The main Arkansas bankruptcy court is in Little Rock with a divisional office in Fayetteville. You can find information on forms, local rules, and more on the court’s website.

Bankruptcy Filing Fees, Costs, and Forms

Most people have to pay something to file for bankruptcy, but it’s usually well worth it. Here’s what you can expect to pay:

  • approximately $60 or less for required education courses
  • $335 or less for court filing fees (the filing fees will change April 1, 2019), and
  • the costs to retain a bankruptcy lawyer if you choose to do so.

If you can’t afford the filing fee, you can ask the court to waive the filing fee.

The official bankruptcy filing forms are free. Fillable, downloadable forms are available on the U.S. Courts bankruptcy form webpage.

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