Filing Bankruptcy in Arkansas: 8 Things You Need to Know

You may have experienced a financial hardship and now are deciding whether to file bankruptcy in Arkansas. We are sorry to hear that you are needing to read this article right now, but our goal is to explain how everything works, so you can decide whether bankruptcy is right for you. Here’s what we’ll cover:

  1. Filing Bankruptcy in Arkansas
  2. Chapter 7 vs Chapter 13 in Arkansas
  3. Chapter 7 Bankruptcy Arkansas
  4. Chapter 13 Bankruptcy Arkansas
  5. Cost of Chapter 7 and Chapter 13 in Arkansas
  6. Arkansas Bankruptcy Assistance
  7. Arkansas District, Court, And Trustee Information
  8. Alternatives to Bankruptcy in Arkansas

Filing Bankruptcy in Arkansas

You’ll notice from the table of the contents that we focus specifically on Chapter 7 and Chapter 13 bankruptcy. Why? Because these two types of bankruptcy are the most common bankruptcy in America (source). There are other types such as the Chapter 11 and Chapter 11 subchapter 5 bankruptcies, but these are far less common for consumers (source).

Chapter 7 bankruptcy is also known as the liquidation bankruptcy. Chapter 13 bankruptcy is also known as wage earner’s plan. We will cover these in greater detail

Arkansas Bankruptcy Filing Process

The bankruptcy filing process in Arkansas is similar to other states. Generally, the process is as follows for Chapter 7 bankruptcy:

  1. Understand bankruptcy qualification
  2. Decide whether to file Chapter 7 or Chapter 13
  3. Decide whether to hire an attorney
  4. Take the Credit Counseling Course
  5. File Bankruptcy Petition and Other Forms
  6. Arkansas trustee is assigned to the case
  7. Attend 341 Meeting of Creditors (Arkansas court locations below)
  8. Take Second Mandatory Debt Education Course
  9. Receive Bankruptcy Discharge

Chapter 7 vs Chapter 13 in Arkansas

Chapter 7 bankruptcy: In Chapter 7, you are at risk of your nonexempt property being sold and used to pay off debts. It’s generally meant for those who cannot afford to pay little to any of your debt. It’s often less expensive than a Chapter 13 bankruptcy, and you can receive a discharge within 120 days. It stays on your credit report for 10 years.

Chapter 13: In Chapter 13, you reorganize your debts similar to a debt settlement program. Your property above the exemption is often not sold as you may be able to protect your assets. It’s often more expensive than a Chapter 7 bankruptcy, and you generally will receive a discharge in 3 or 5 years. It stays on your credit report for 7 years.

When your debt is discharged, this means that you are not required to pay that debt back.

Chapter 7 bankruptcy Arkansas

As Chapter 7 is the most common consumer bankruptcy filing, we will cover this bankruptcy first. In order to file Chapter 7 bankruptcy, you have to go through means-testing. The means test was added to the Bankruptcy Code in 2005 to prevent bankruptcy fraud. The income requirement for Arkansas helps ensure that a person with a sufficient income to pay back some of the debts may file a Chapter 13 instead of Chapter 7.

Arkansas bankruptcy means test

The first part of the means test is to calculate your current monthly income. A Arkansas bankruptcy means test calculator can help you estimate whether you qualify for a Chapter 7 below or above the median, which is to say that you may qualify for a Chapter 7 even if your income exceeds the median in Arkansas, which is why a means test calculator may help.

If you want to do a ballpark estimate, you can estimate your current monthly income by taking the last 6 months of your income and dividing by 6. You will then be able to compare that figure to the Arkansas means testing data for cases filed on or after May 1, 2020. You would add $9,000 to the annual income for any individuals in the household greater than 9 people.

Means testing for Arkansas

# of People Annual Income
1 $43,230
2 $53,946
3 $58,258
4 $74,086
5 $83,086
6 $92,086
7 $101,086
8 $110,086
9 $119,086

Arkansas bankruptcy exemptions

We will cover Arkansas bankruptcy exemptions next because you may qualify for a Chapter 7 bankruptcy, but wonder whether they are going to come over and try to sell all your assets.

Firstly, in Chapter 7, you may be worried about losing your vehicle (non-luxury). Often a vehicle can be reinstated with a car payment in Chapter 7 bankruptcy in Arkansas. Here’s a link to the Arkansas bankruptcy exemptions.

It’s important to note that Arkansas does also utilize the federal exemptions.

Please also note that you may want to check the Arkansas government website for a complete list of Arkansas bankruptcy exemptions and up to date information.

Chapter 13 bankruptcy Arkansas

Chapter 13 bankruptcy Arkansas is a payment plan bankruptcy where your debts are reorganized via the bankruptcy court, often in a 3 or 5-year payment plan. One of the most important questions is determining your monthly plan payment. Once you have a sense of your plan payment, you compare that payment to your current monthly obligations to see whether you may afford Chapter 13 bankruptcy. Debt settlement is often an alternative to a Chapter 13 bankruptcy. For a deep dive on Chapter 13 bankruptcy, you may want to check out the article titled Chapter 13 Arkansas

Chapter 13 Payment

One of the most important things for a Chapter 13 bankruptcy is determining whether you can afford the Chapter 13 plan payment and comparing it to your current monthly obligations. There are various bankruptcy forms that can be used to estimate your Chapter 13 plan payment, but we found the easiest way is to use the Arkansas Chapter 13 Calculator which uses bankruptcy forms to help estimate plan payment.

Arkansas Bankruptcy Assistance

You may be wondering what sort of bankruptcy assistance is available in Arkansas. Let’s go through some of the options.

Arkansas Legal Assistance:

You may be considering filing bankruptcy in Arkansas and wondering what sort of legal assistance is available. You may want to check out any of the following options:

Cost of Chapter 7 and Chapter 13 in Arkansas

Any important question that you are probably asking yourself is what is the cost of attorney fees, filing fees and whatever other costs are associated with bankruptcy.

  • Attorney Fee: Often different cities and counties in Arkansas will have different attorney costs, including variability of cost based on experience. You may want to check out a Arkansas bankruptcy cost calculator to estimate the cost for your zip code.
  • Filing, Admin and/or trustee surcharge fee: The fee for Chapter 7 is $335 and the fee for Chapter 13 is $310 (source).

Arkansas Districts and Courts

Western

  • United States Courthouse
    101 South Jackson Avenue
    Room 205
    El Dorado, Arkansas
  • John Paul Hammerschmidt Federal Building
    35 East Mountain Street
    Room 510
    Fayetteville, Arkansas 72701-5354
  • Judge Isaac C. Parker Federal Building
    30 South 6th Street
    Room 1038
    Fort Smith, Arkansas
    72901-2437
  • J. Smith Henley Federal Building
    402 North Walnut Street
    Harrison, Arkansas
    72601-3630
  • United States Courthouse
    100 Reserve Street
    Room 347
    Hot Springs, Arkansas
    71901-4143

Eastern

  • 500 West Capitol Avenue
    Little Rock, AR 72201
  • 617 Walnut
    Helena, AR 72342
  • 615 South Main Street
    Room 312
    Jonesboro, AR 72401

Arkansas Bankruptcy Trustees

Here are the Chapter 7 Bankruptcy Trustees in Arkansas and the Chapter 13 Bankruptcy trustees in Arkansas.

Chapter 7 Trustee(s) in Arkansas

District Name Phone
Eastern Richard L. Cox (501) 623-1759
Eastern James F. Dowden (501) 324-4700
Eastern Hamilton Moses Mitchell (501) 425-3431
Eastern William L. Owens (870) 336-6505
Eastern M. Randy Rice (501) 374-1019
Western Richard L. Cox (501) 623-1759
Western James F. Dowden (501) 324-4700
Western R. Ray Fulmer, II (479) 806-6007
Western Hamilton Moses Mitchell (501) 425-3431
Western Bianca M. Rucker (479) 445-6340
Western Frederick S. Wetzel, III (501) 663-0535
Western Renee S. Williams (501) 624-4330

Chapter 13 Trustee(s) in Arkansas

District Name Phone
Eastern Joyce B. Babin (501) 537-2500
Eastern Jack W. Gooding (501) 537-4400
Eastern Mark T. McCarty (501) 801-5600
Western Joyce B. Babin (501) 537-2500
Western Jack W. Gooding (501) 537-4400
Western Mark T. McCarty (501) 801-5600

Alternatives to Bankruptcy in Arkansas

You may be reading through this and wondering what are the alternatives to Chapter 7 or Chapter 13 bankruptcy. The most common alternatives are debt management, debt settlement, and debt payoff planning. Each of these options have pros and cons, so doing your due diligence is important. You can also feel free to reach out to us if you have any questions whatsoever.