Bankruptcy in Arkansas
Arkansans have made history as exampled by General Douglas MacArthur, the Little Rock Nine, and President William Jefferson Clinton; and, they have made making history fun along the way (i.e. Johnny Cash, John Grisham, and Glen Campbell are from “The Natural State”, Arkansas.)
All of these famous Arkansans have faced troubled times, some more publically than others. If you are facing troubled times and want to rewrite your own personal history, this article is for you.
Trouble in mind, I’m blue
But I won’t be blue always,
‘Cause that sun is gonna shine in my back door someday
In this article, we’ll show you how Arkansas bankruptcy law is unique; discuss Chapter 7 or Chapter 13 options; show you how to find and select a bankruptcy lawyer; and give you insider insight on how to prepare to work with a bankruptcy attorney.
How Arkansas Bankruptcy Law is Unique
In Arkansas, state exemptions let you know how much property you can keep and still benefit from bankruptcy protection. (These exemptions are different than the laws of other states.) In addition, your retirement accounts are protected under federal law.
Here are some examples of Arkansas property exemptions. A qualified bankruptcy lawyer can show you how to make the most of your exemptions; in fact, most filers don’t lose any assets.
Most folks ask about their home. Arkansas provides that your homestead is protected regardless of the value so long as it is ? of an acre or less if you live in town or 80 acres out of town.
Some personal property, books, clothes, insurances, wages, tools of the trade, and the like are protected up to certain limits.
Your motor vehicle up to $1,200 is protected; double this to $2,400 if you’re married and filing bankruptcy jointly.
If you’d prefer, you may use the federal bankruptcy exemptions; ask your lawyer which set of exemptions will protect your assets best.
The Arkansas Options: Chapter 7 or Chapter 13
You must select a bankruptcy chapter based on your debts, income, and expenses.
Most folks, who are eligible to file under Chapter 7, do so because credit card debts, medical bills, and personal loans are wiped out and never have to be paid back.
To qualify for Chapter 7, you must meet the “means test”; and, while there are other ways to qualify, the easiest way to qualify is by income. If your income is lower than the state median income you qualify.
To give you a general idea, an individual can make up to $35,283 and qualify for Chapter 7. As your family size increases, the maximum income line increases as well. For example, a family of four can have an income of $58,051 and still qualify.
If you have student loan, alimony, child support, or tax debt, Chapter 7 may not work for you even if you do qualify. These debts must be repaid and cannot be discharged in bankruptcy.
Chapter 13 is the most often selected alternative to Chapter 7. Debts are reorganized under terms that are more favorable to you than the original debt and are repaid over 3 to 5 years.
How to Find and Select a Bankruptcy Attorney in Arkansas
The best way to find a bankruptcy attorney is to get a referral from a loved one; and, the best way to select a bankruptcy attorney is through interaction with that attorney. Make sure the attorney focuses on bankruptcy law and is licensed in the state of Arkansas.
In the alternative, you can get a referral from the local bar association, professional advisor, or online by searching “Find an Arkansas Bankruptcy Attorney”.
Then make your selection after chatting with your prospective attorneys and asking questions. Ask how they can help you, what you can expect, how long it will take, and how much it will cost. Importantly, ask how you will get future questions and concerns addressed.
How to Prepare to Work with a Bankruptcy Attorney
You may think your stack of paperwork is surely as big as the city of Little Rock! That’s normal. Organize your bills, monthly expenses, debts, income, and asset lists into piles. Also collect your mortgage, car payment, student loan, tax return, divorce, and insurance policy documentation.
You’ll need all of this information to fill out your bankruptcy attorney’s forms. This will help him or her give you good advice, show you how either Chapter 7 or Chapter 13 is appropriate, and get you moving out of troubled times into a fresh start. If you get frustrated or overwhelmed, remember what the man in black said, “Cause that sun is gonna shine in my back door someday.”