Arkansas Bankruptcy Laws ^HOT^
Facing financial challenges is a part of life. But if you're one of the millions struggling financially due to a job loss, illness, or another event in Arkansas, bankruptcy can help. Here, you'll find an explanation of Chapters 7 and 13, checklists to help you understand the process and stay organized, and Arkansas's property exemption laws and filing information.
arkansas bankruptcy laws
But Arkansas's laws come into play in a significant way. They determine the property you can keep in your bankruptcy case. You'll also need to know other filing information, which we explain after reviewing some basics.
Chapter 13 bankruptcy filers must pay creditors some or all of what they owe using a three- to five-year repayment plan. But the payment plan allows Chapter 13 to offer benefits not available in Chapter 7. For instance, not only do you keep all of your property, but you can save your home from foreclosure or your car from repossession. If you need time to repay a debt you can't discharge in bankruptcy, you can use this chapter to force a creditor into a payment plan.
But you can't discharge all debts. Nondischargeable debts, like domestic support arrearages and recent tax debt, won't go away in bankruptcy, and student loans aren't easy to wipe out (you'd have to win a separate lawsuit). You'll want to be sure that bankruptcy will discharge (get rid of) enough bills to make it worthwhile.
We all know that seeing the forest helps us recognize the trees, so it's probably a good time to consider the significant steps you'll take during your bankruptcy journey. Think of this checklist as a roadmap, but you can also use it to track your progress. The good news? You've already made headway on the first two items!
Exemptions change periodically, and these figures could change before we update them again in June 2023. You can meet with a bankruptcy attorney for current amounts and learn how they apply to your situation.
You won't lose everything in bankruptcy. You'll use your state bankruptcy exemption laws to protect your property. We list the significant exemptions below, but understanding the following will help you maximize what you'll keep in your case.
You'll meet the initial requirement if you've never filed for bankruptcy before. Otherwise, check whether enough time has passed to allow you to file again. The waiting period varies depending on the chapter previously filed and the chapter you plan to file. Learn more about multiple bankruptcy filings.
You'll qualify for Chapter 7 bankruptcy if your family's gross income is lower than the median income in your state for the same size family. Add all gross income earned during the last six months and multiply it by two. Compare the figure to the income charts on the U.S. Trustee's website (select "Means Testing Information").
You can expect creditors to call until you file. It's usually best to ignore them because telling creditors about your bankruptcy can encourage them to take more drastic collection steps before losing the right to collect altogether. However, if you hire counsel and refer creditors to your lawyer, they'll have to stop calling you.
Are you curious whether your case is simple enough to file yourself? Our quiz will help you identify potential complications while educating you about bankruptcy. You'll find it here: Do I Need a Lawyer to File for Bankruptcy?
Your case starts when you file your paperwork with the local bankruptcy court and either pay the filing fee or request a fee waiver. Also, each court creates rules you must follow, and some might have local forms, too. You'll find the court's local rules and instructions on the Arkansas bankruptcy court website by clicking "Filing Information" on the navbar. To determine where to file, go to "Court Information" and click on "Arkansas Map-County Codes-Case Numbering."
We wholeheartedly encourage research and learning, but online articles can't address all bankruptcy issues or the facts of your case. The best way to protect your assets in bankruptcy is by hiring a local bankruptcy lawyer.
Whether due to an unexpected job loss, a medical event, a court judgment, or other change in economic circumstances, a person will find that he or she is no longer bringing in enough income to pay his or her bills. This economic condition, in which the money coming in is less than the amount going out to pay debts, is called insolvency. When a person becomes insolvent, he or she may consider bankruptcy as a way to deal with this overwhelming debt and get a fresh start.
In the bankruptcy system, a person filing for bankruptcy protection is called the "debtor," For the vast majority of individual debtors, there are two types of bankruptcy filings, those filed under Chapter 7 of the bankruptcy code and those filed under Chapter 13 of the bankruptcy code. These two types of bankruptcy are quite different, have different requirements for filing, and are designed to meet different goals.
A bankruptcy filed under Chapter 7 is designed to discharge the outstanding debts of so called "honest debtors" and allow them to start fresh free from the quagmire of overwhelming debt. In a Chapter 7 bankruptcy, the Trustee will sell the debtor's nonexempt property and distribute the proceeds from that sale to the debtor's creditors. Most of the remaining debt is then discharged, that is, the debtor has no liability to repay it.
In order to file under Chapter 7, the debtor must meet certain income guidelines. First and foremost is the requirement that the debtor's current monthly income be below the median income for their state. So, depending on which state you live in, qualifying incomes will be different. Arkansas currently has the second lowest median income of any state. Only Mississippi's median income is lower. If your income is below the state median, you qualify to file a Chapter 7 bankruptcy without further inquiry into your income. However, if your income is at or above the state median, the debtor is subject to a "means test" to determine if the filing of a chapter 7 is presumptively abusive. If the "means test" shows lack of abuse, the debtor can file a Chapter 7. If the "means test" does not overcome the presumption of abuse, the case will most often be converted to a chapter 1, if the debtor consents to the conversion, or it will be dismissed.
When a debtor files a chapter 7 bankruptcy, he or she does not enter into a repayment plan as in a chapter 13 bankruptcy. Instead, the bankruptcy trustee takes possession of the debtor's nonexempt property, sells it, and uses the money from the sale to pay creditors according the provisions in the Bankruptcy Code. This only applies to nonexempt property. The Bankruptcy Code lists types of property that are "exempt" from the trustee's ability to sell a debtor's assets. If an asset qualifies as "exempt" under the Bankruptcy Code, then the debtor is allowed to keep it. So, while most debtors who qualify for a Chapter 7 bankruptcy will most likely be able to keep the vast majority of their property, filing under Chapter 7 may result in the loss of some of the debtor's property.
In addition to the means test, a person must have taken an approved credit counseling course within 180 days before filing the bankruptcy petition. Further, a person must not have had a bankruptcy case dismissed within the previous 180 days because of the debtor's willful failure to appear before the court or comply with orders of the court, or the debtor voluntarily dismissed the previous case after creditors sought relief from the bankruptcy court to recover property upon which they hold liens.
One of the primary purposes of bankruptcy is to discharge certain debts to give an honest individual debtor a "fresh start." The debtor has no liability for discharged debts. In a chapter 7 case, however, a discharge is only available to individual debtors, not to partnerships or corporations. Although an individual chapter 7 case usually results in a discharge of debts, the right to a discharge is not absolute, and some types of debts are not discharged. Moreover, a bankruptcy discharge does not extinguish a lien on property.
A Chapter 7 case begins when the debtor files a petition with the bankruptcy court serving the area where the individual lives. In addition to the bankruptcy petition, the debtor must also file other forms disclosing all property and debts, current income, current expenses, a statement of financial affairs, all current contracts, and unexpired leases. These forms are called "schedules" and should be filed at the same time as the bankruptcy petition. The debtor must also provide tax returns to the trustee. Finally, individuals with primarily consumer debts must also file a certificate of credit counseling and a copy of any debt repayment plan developed through credit counseling, evidence of income for the 60 days prior to filing, a statement of monthly net income and any expected change in income or expenses, and a record of any interest the debtor has in federal or state qualified education or tuition accounts.
In order to complete the Official Bankruptcy Forms that make up the petition, statement of financial affairs, and schedules, the debtor must provide the following information:-A list of all creditors and the amount and nature of all debts;-A list of all of the debtor's income, including the amount, source, and how often the debtor is paid;-A list of all of the debtor's property; and-A detailed list of the debtor's monthly living expenses, such as food, clothing, shelter, utilities, taxes, transportation, medicine, grooming, entertainment, and other expenses.-If a married person is filing a Chapter 7 bankruptcy, his or her spouse's information must be gathered and disclosed to the Court, even if the spouse is not filing bankruptcy or is filing separately.
In addition to information regarding property, debts, income and etc., the debtor will file a schedule of "exempt" property. The Bankruptcy Code allows a debtor to protect certain property because it is exempt under federal bankruptcy law or under the laws of the debtor's home state.In Arkansas, the debtor may choose to use either the exemptions provided by federal law or the exemptions provided by Arkansas state law. However, you must choose one or the other, and cannot use both. 041b061a72