Since bankruptcy is a federal statute system, the steps for filing either a Chapter 13 or Chapter 7 bankruptcy is closely identical in all states, which include Arkansas. In Arkansas however, state statutes are still very much crucial, most specifically when establishing property exemptions for determining which property you could keep or how much to repay creditors. Essentially, here are some bankruptcy laws specific to Arkansas:
- Mandatory Credit Counseling – Prior to filing for bankruptcy, you are required to finish credit counseling with a U.S Trustee Office-approved agency.
- Where You Should File – The state’s primary bankruptcy court is located in Little Rock, but they also have a division office located in Fayetteville.
- Arkansas Means Test – The means test involves comparing your income to the state’s median income for households of the same size. In the event that your income is lower than the state’s median income, you’ll qualify for Chapter 7 bankruptcy. If you decide to file for a Chapter 13 instead, you could repay your debts in only three years rather than the typical five, adds The Baim Law Firm and other bankruptcy attorneys in Little Rock.
- Arkansas Property Exemptions – Like all other states, Arkansas has predetermined rules on property exemptions, but you’re free to select either federal exemptions or state exemptions, and you can’t combine exemptions from the two lists. Homeowners who have filed for bankruptcy in the state typically chose the state’s list since it enables debtors to exempt home equity in unlimited amounts, up to a quarter of an acre in a village, town or property in the city, or 80 acres somewhere else. However, if you don’t own any property, you might consider choosing the federal list instead.
- Mandatory Debtor Education – Following the filing of required forms, but prior to obtaining a discharge, you’ll be required to complete debtor education. Similar to the required credit counseling, which you’ll have to undergo prior to filing forms, you should avail of this course from a U.S. Trustee Office approved agency.
For more detailed information regarding your case, it’s best to consult an experienced bankruptcy lawyer. They will help you decide which bankruptcy option is most suitable to your circumstances and help you with all the legal requirements of your case.