Arkansas bankruptcy laws should be known by every resident of the state of Arkansas. When your debts are out of control there are many options you can choose from. If you think your last resort is to file for bankruptcy, make sure that it is your last and only option. The Bankruptcy Code is the same all throughout the country; however, there are specific Arkansas bankruptcy laws you need to know to give you an overview of what to expect and what to do.
Choosing a lawyer who knows the specific state laws in Arkansas is very important in filing for bankruptcy because he will help you determine the most appropriate form of bankruptcy to file for and guide you through the formal filing of bankruptcy petition.
There are two forms of bankruptcy: Chapter 7 and Chapter 13. The former kind is the easiest bankruptcy to apply for and it diminishes all your debts. To qualify for this bankruptcy you need to pass an evaluation where your income will be compared with the median income level based on Census Bureau data. If your income is below the median, then you qualify for Chapter 7. A trustee is assigned to review your case and help you dispose non-exempt assets if there are any, so you can pay your creditors.
Chapter 13 is another kind of bankruptcy that an individual, couple or family can apply for. Unlike Chapter 7, this kind is best suited for individuals who have a lot to lose when it comes to non-exempt assets. To protect these assets, you can instead propose a repayment plan that will work for you and will also benefit your creditors. In this repayment plan, you have to find a way to pay all your outstanding debts out of your regular income in 3 to 5 years. Payments should be given to your trustee and he in turn, pays it to the creditors. It is also the duty of the trustee to monitor that all the payments of the debtors are up to date.
Although your assets will be sold to pay off your debts in Chapter 7 bankruptcy, Arkansas bankruptcy laws set some exemptions that are protected from creditors:
• Real estate property of $800 for single individuals, $1,250 if married; or up to 80 acres;
• Earned wages, but unpaid up for 2 months;
• One vehicle not to exceed $1,200;
• Personal properties including tools of trade worth $750, clothing, wedding rings regardless of the amount, and any personal property amounting to $500 for married couples and $200 for single individuals; and
• Public benefits, life, and disability insurance.
If you have decided to file bankruptcy, ask your lawyer’s assistance. The state uses the electronic case filing system for you to submit your documents, and it should be in PDF format. Along with the documents, you have to submit a creditor’s matrix where the name, addresses, and counsel of the creditors are listed. There are fees to pay when filing a bankruptcy petition, and for documents submitted electronically, your fees will be charged to your credit card.
The whole bankruptcy process is as complicated as any other laws in the state, so it is best that you seek advice from your lawyer.