Arkansas Bankruptcy Laws

The state of Arkansas is divided into two bankruptcy districts: Arkansas Eastern Bankruptcy Court and Arkansas Western Bankruptcy Court. These courts serve the entire state of Arkansas . Most people in Arkansas file under Chapter 7, although there are several benefits to filing under changer 13. Only businesses and those with an extreme amount of assets and debt file Chap 11 BK.

Arkansas Bankruptcy Exemptions
Exempt property is property that you are allowed to keep in a chapter 7 bankruptcy. State law determines what property is exempt. According to Lawyers.com, you can choose from two exemptions schemes: federal bankruptcy laws or state bankruptcy laws. If you choose the state bankruptcy law exemptions, you must have lived in the state of Arkansas for 730 days (2 years) before filing or lived there the majority of the 180 day period preceding the 2 year period.

Under the federal bankruptcy laws, you may keep:

• Your home, including co-op or mobile home, to $20,200.
• Life insurance payments for person you depended on, needed for support.
• Life insurance policy with loan value, in accrued dividends or interest to $10,775.
• Unmatured life insurance contract, except credit insurance policy.
• Alimony, child support needed for support.
• Pensions and Retirement Benefits, ERISA - qualified benefits needed for support.
• $575 per item in any household goods up to a total of $10,775.
• Health Aids.
• Jewelry to $1,350.
• Lost earnings payments.
• Your motor vehicle to $3,225.
• Personal injury compensation payments to $18,450; wrongful death payments; crime victims' compensation; public assistance; social security; unemployment compensation; and veterans' benefits.
• Tools of trade up to $2,025.
• Wild Card - $1,075 of any property plus up to $10,125 of any amount of unused homestead exemption.
• Married couples may double the amount of the federal exemptions.

Under the state bankruptcy laws, as provided in the Arkansas Constitution, you may keep:

• Your residence located in any city, town or village, if it is limited to one acre of land with improvements thereon, and does not exceed in value the sum of $2,500. If the homestead is located outside any city, town or village, it may not exceed 160 acres of land, with the improvements thereon, and shall not exceed in value the sum of $2,500.
• The wearing apparel for you and your family.
• If you are not married, you may select certain personal property, up to the sum of $200. The exemption amount is increased to $500 if you are married or the head of a family.
• Tools of trade, professional library $750.
• Motor vehicle $1,200.
• Life and disability insurance $1,000
.
• IRA contributions made more than a year prior to bankruptcy $20,000.
• Sixty days' of wages earned but unpaid.
• Unemployment benefits, workers' compensation benefits, public welfare assistance.

NOTE: These are the major bankruptcy exemptions. Check with your bankruptcy lawyer for a full exemptions list.

New Bankruptcy Law Changes - Outlines major changes you should know about in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), also known as the new bankruptcy laws.

This is important! The new bankruptcy law requires all debtors to fulfill two education requirements: a credit counseling course prior to filing and a financial management course before obtaining a discharge. Failure to complete either of these courses and file the appropriate certificates with the court will prevent a successful bankruptcy. The Chapter 13 Trustee will offer the required courses to Chapter 13 debtors, but Chapter 7 debtors are required to take the courses on their own.

Find a U.S. Trustee Approved Pre-Bankruptcy Counseling Provider and Post-Filing Debtor Education Provider.