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:
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?
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.”
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:
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.
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?
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.
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.
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:
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.