If you’re considering filing bankruptcy in Arkansas, you’ll need to understand the types, costs, as well as some helpful advice to finding good attorneys.

Am I Qualified for Bankruptcy?

Bankruptcy is a legal process that provides individuals and businesses with financial relief when they are unable to repay their debts. Filing for bankruptcy in Arkansas, like in other parts of the United States, requires meeting certain qualifications and going through a structured legal procedure.

Qualifications for Filing Bankruptcy in Arkansas:

1. Residency: To file for bankruptcy in Arkansas, you must be a resident of the state or have a principal place of business or assets located within the state. Generally, you need to have lived in Arkansas for at least 91 days before filing for bankruptcy.
2. Credit Counseling: Before filing for bankruptcy, you are required to complete credit counseling from an approved credit counseling agency. This counseling helps you explore alternatives to bankruptcy and provides valuable financial education.
3. Means Test: One of the key determinants of your eligibility for bankruptcy is the means test. This test assesses your income and expenses to determine if you qualify for Chapter 7 bankruptcy or if you should consider Chapter 13 bankruptcy instead. Chapter 7 is typically for individuals with limited disposable income, while Chapter 13 is for those with regular income and the ability to repay some of their debts through a repayment plan.

Types of Bankruptcy in Arkansas:

Arkansas, like other states, primarily offers two types of bankruptcy for individuals:

1. Chapter 7 Bankruptcy: Also known as “liquidation” bankruptcy, Chapter 7 is designed for individuals who cannot afford to repay their debts. To qualify for Chapter 7, you must pass the means test, which evaluates your income, expenses, and family size. In a Chapter 7 bankruptcy, most of your unsecured debts (such as credit card debt and medical bills) are discharged, meaning you are no longer legally obligated to pay them. However, certain assets may be sold to repay creditors.
2. Chapter 13 Bankruptcy: Chapter 13 bankruptcy, also called “reorganization” bankruptcy, is an option for individuals who have a regular income and can create a feasible repayment plan to pay off a portion of their debts over a specified period, usually three to five years. Under this plan, you make monthly payments to a bankruptcy trustee, who distributes the funds to your creditors. Chapter 13 can help you keep valuable assets like your home or car, which might be at risk in Chapter 7.

General Steps for Filing Bankruptcy in Arkansas:

Filing for bankruptcy in Arkansas involves several steps, including:

1. Credit Counseling: As mentioned earlier, you must complete a credit counseling course from an approved agency before filing for bankruptcy. You will receive a certificate of completion, which you will need when filing your bankruptcy petition.
2. Complete Bankruptcy Forms: You’ll need to gather and complete various bankruptcy forms, including the official bankruptcy petition, schedules, and statements that detail your financial situation, income, expenses, assets, and debts. These forms are filed with the bankruptcy court.
3. Pay Filing Fees: There are filing fees associated with bankruptcy, which can vary depending on the type of bankruptcy you’re filing for. If you cannot afford to pay the fees all at once, you may request a fee waiver or propose a payment plan.
4. File Your Bankruptcy Petition: Submit your completed bankruptcy forms, along with the required fees or fee waiver application, to the Arkansas bankruptcy court serving your area. The court will assign a bankruptcy trustee to oversee your case.
5. Automatic Stay: Once your bankruptcy petition is filed, an automatic stay goes into effect, preventing creditors from taking further collection actions against you. This includes halting foreclosure proceedings, wage garnishments, and debt collection calls.
6. Creditors’ Meeting: You will attend a creditors’ meeting, also known as a 341 meeting, where your bankruptcy trustee and creditors can ask you questions about your financial situation and bankruptcy documents. This meeting is typically straightforward and non-confrontational.
7. Repayment Plan (Chapter 13 Only): If you are filing for Chapter 13 bankruptcy, you will need to propose a repayment plan that outlines how you will repay your debts over the designated period. The bankruptcy court must approve this plan.
8. Discharge or Repayment: Depending on the type of bankruptcy, you will either receive a discharge of eligible debts (Chapter 7) or begin making payments under your approved repayment plan (Chapter 13).
9. Financial Management Course: After filing for bankruptcy but before your case is closed, you must complete a financial management course from an approved agency. This course helps you manage your finances more effectively in the future.
10. Case Closure: Once all requirements are met, your bankruptcy case will be closed, and you will have a fresh financial start (Chapter 7) or continue making payments according to your approved plan (Chapter 13).

It’s essential to note that bankruptcy can have long-term consequences on your credit and financial future, so it should be considered as a last resort. Before deciding to file for bankruptcy, it is advisable to consult with a qualified bankruptcy attorney who can provide personalized advice based on your unique financial situation. An attorney can also guide you through the complex process, ensuring you meet all the necessary qualifications and requirements for filing bankruptcy in Arkansas.

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Do You Need a Lawyer to File For Bankruptcy in Arkansas?

Filing for bankruptcy in Arkansas, like in other states, is a legal process that individuals can undertake without an attorney, but whether you need a lawyer depends on your specific situation and comfort level with legal procedures. Here are some factors to consider when deciding whether to hire an attorney to file for bankruptcy in Arkansas:

1. Complexity of Your Case:

• If your financial situation is relatively simple, and you have minimal assets and debts, you may be able to navigate the bankruptcy process on your own. Chapter 7 bankruptcy, in particular, tends to be less complicated for individuals with straightforward cases.

2. Legal Knowledge:

• Filing for bankruptcy involves completing a substantial amount of paperwork, adhering to specific deadlines, and understanding complex legal terminology. If you are comfortable with legal forms and processes, you may be able to file pro se (representing yourself).

3. Chapter 7 vs. Chapter 13:

• Chapter 7 bankruptcy is generally more straightforward and may be more manageable for those considering self-filing. Chapter 13 bankruptcy, on the other hand, involves creating a repayment plan that must be approved by the court and managed over several years, making it more complex and potentially requiring legal guidance.

4. Asset Protection:

• If you have valuable assets, such as a home or a business, that you want to protect during bankruptcy, hiring an attorney can be crucial. They can help you navigate exemptions and strategies to retain as much property as possible.

5. Income and Means Test:

• The means test, used to determine your eligibility for Chapter 7 bankruptcy, can be complicated. An attorney can help you assess whether you pass the test and whether Chapter 7 or Chapter 13 is a better option for your circumstances.

6. Creditor Challenges:

• If your bankruptcy case involves challenges from creditors, such as objections to the discharge of specific debts, having an attorney to represent your interests can be essential. They can provide legal defense and negotiate on your behalf.

7. Legal Advice and Guidance:

• Bankruptcy attorneys have experience and knowledge of the bankruptcy code and local rules, which can help you make informed decisions about your financial situation. They can provide advice on whether bankruptcy is the right choice for you and help you explore alternatives.

8. Mistakes and Errors:

• Filing for bankruptcy incorrectly can lead to delays, dismissals, or even legal consequences. An attorney can help ensure that your bankruptcy petition and supporting documents are prepared accurately and submitted correctly.

9. Court Appearances:

• While most bankruptcy cases do not require formal court appearances, if issues arise or your case becomes more complex, you may need to appear before a bankruptcy judge. An attorney can represent you in court, providing peace of mind and legal expertise.

10. Debt Discharge and Financial Future:

• Bankruptcy can have long-lasting effects on your credit and financial future. An attorney can help you plan for life after bankruptcy, including rebuilding your credit and managing your finances responsibly.

Whether you need a lawyer to file for bankruptcy in Arkansas depends on your individual circumstances. While it is possible to file for bankruptcy pro se, having legal representation can provide numerous benefits, including expertise, guidance, and peace of mind. If you’re unsure about whether to hire an attorney, consider consulting with a bankruptcy lawyer for an initial evaluation of your case. They can help you understand your options and make an informed decision based on your unique financial situation and legal needs.

Cost to File Chapter 7 Bankruptcy in Arkansas

The cost to file for Chapter 7 bankruptcy in Arkansas includes various fees and expenses associated with the legal process. Here’s a breakdown of the main costs involved:

1. Filing Fee: The primary expense when filing for Chapter 7 bankruptcy in Arkansas is the filing fee paid to the bankruptcy court. Please note that these fees may change over time, so it’s essential to check with the Arkansas bankruptcy court or consult with an attorney for the most up-to-date fee information.
2. Credit Counseling and Debtor Education Courses: Before filing for bankruptcy, you are required to complete credit counseling and debtor education courses from approved agencies. These courses typically cost around $32 to $62 each, although fees may vary depending on the provider and your location. Some agencies offer reduced fees or fee waivers for those with low incomes.
3. Attorney Fees (Optional): While it’s possible to file for Chapter 7 bankruptcy without an attorney (pro se), many individuals choose to hire a bankruptcy attorney to help navigate the process successfully. Attorney fees can vary widely based on factors such as the complexity of your case, the attorney’s experience, and your location. On average, you can expect attorney fees for a Chapter 7 bankruptcy case to range from $1,200 to $2,800 or more. It’s essential to discuss fees and payment arrangements with your chosen attorney upfront.
4. Credit Report: You may want to obtain a copy of your credit report before filing for bankruptcy to ensure that all your debts are included in your bankruptcy petition. While you are entitled to one free credit report annually from each of the three major credit bureaus (Equifax, Experian, and TransUnion), additional reports may incur a fee.
5. Other Potential Costs: Depending on your specific circumstances, there may be other costs associated with your Chapter 7 bankruptcy case. For example, if you need to request certified copies of court documents or if there are exceptional circumstances in your case, you might incur additional expenses.

Keep in mind that bankruptcy can have a significant impact on your financial future, so it’s essential to consider all the costs and benefits associated with the process. Consulting with a bankruptcy attorney, even if you ultimately decide to file pro se, can provide valuable insights into the bankruptcy process and help ensure that your case proceeds smoothly and successfully. An attorney can also advise you on potential alternatives to bankruptcy and help you make informed decisions based on your unique financial situation.

Cost to File Chapter 11 Bankruptcy in Arkansas

Filing for Chapter 11 bankruptcy in Arkansas can be a complex and costly process, primarily designed for businesses and individuals with substantial assets and debts who wish to reorganize their finances. The cost of filing for Chapter 11 bankruptcy can vary widely depending on the complexity of the case and the specific circumstances involved. Here are some of the main costs associated with filing for Chapter 11 bankruptcy in Arkansas:

1. Filing Fee: The initial filing fee for a Chapter 11 bankruptcy case is a significant cost. The filing fee for a Chapter 11 case is $1,890. This fee may be subject to change, so it’s crucial to check with the Arkansas bankruptcy court or consult with legal counsel for the most up-to-date fee information.
2. Attorney Fees: Chapter 11 bankruptcy cases are highly complex and require legal expertise. Most individuals and businesses filing for Chapter 11 bankruptcy in Arkansas hire experienced bankruptcy attorneys to guide them through the process. Attorney fees for Chapter 11 cases can be substantial and vary depending on the size and complexity of the case. They typically range from several thousand dollars to tens of thousands of dollars, and sometimes even more for complex cases.
3. Court-Appointed Professional Fees: In some Chapter 11 cases, the court may appoint professionals, such as bankruptcy trustees or examiners, to oversee or investigate the case. Their fees are typically paid from the bankruptcy estate, which can add to the overall cost.
4. Administrative Expenses: Chapter 11 cases often involve administrative expenses related to managing the bankruptcy estate and conducting the reorganization process. These expenses can include fees for accountants, appraisers, and other professionals who assist in the case.
5. Creditors’ Committee Expenses: In some Chapter 11 cases, a committee of unsecured creditors may be formed to represent the interests of creditors. The expenses associated with the creditors’ committee, including legal fees, are generally paid from the bankruptcy estate.
6. Fees for Professionals Retained by the Debtor: If the debtor retains professionals, such as financial advisors or consultants, to assist with the reorganization process, these fees will need to be paid.
7. Plan Confirmation Hearing Costs: There may be costs associated with preparing for and attending the plan confirmation hearing, which is a critical step in the Chapter 11 process.
8. Operating Expenses During Bankruptcy: Businesses filing for Chapter 11 bankruptcy may incur ongoing operating expenses during the bankruptcy process, such as employee salaries, rent, utilities, and other necessary costs.

It’s essential to understand that Chapter 11 bankruptcy is a complex and costly process, and it is typically reserved for businesses and individuals with substantial assets and debts who are seeking to reorganize their financial affairs and continue their operations. Due to the complexity of Chapter 11 cases, it’s highly advisable to consult with an experienced bankruptcy attorney who can assess your specific situation, provide guidance, and help you navigate the process effectively.

Cost to File Chapter 13 Bankruptcy in Arkansas

Filing for Chapter 13 bankruptcy in Arkansas involves various costs and fees that individuals must consider when pursuing this form of bankruptcy relief, which is designed for those with a regular income who want to create a repayment plan to address their debts. Here’s a breakdown of the main costs associated with filing for Chapter 13 bankruptcy in Arkansas:

1. Filing Fee: The filing fee for a Chapter 13 bankruptcy case in Arkansas is $372. It’s essential to note that these fees may change over time, so it’s advisable to check with the Arkansas bankruptcy court or consult with an attorney for the most current fee information.
2. Attorney Fees: Many individuals seeking Chapter 13 bankruptcy assistance choose to hire an attorney to navigate the complex legal process. Attorney fees for Chapter 13 cases can vary based on factors such as the complexity of the case and the attorney’s experience. On average, attorney fees for a Chapter 13 bankruptcy case may range from approximately $2,890 to $4,320 or more. The fees may include the attorney’s assistance in developing a feasible repayment plan and representing you throughout the bankruptcy process.
3. Credit Counseling and Financial Management Courses: Before filing for Chapter 13 bankruptcy, you are required to complete credit counseling and financial management courses from approved agencies. These courses typically cost around $28 to $60 each, but fees may vary depending on the provider and your location. Some agencies offer reduced fees or fee waivers for those with low incomes.
4. Court-Appointed Trustee Fees: In a Chapter 13 case, a bankruptcy trustee is appointed to administer the repayment plan. The trustee’s fees are generally included in your monthly plan payments. The amount paid to the trustee depends on the terms of your repayment plan and may vary.
5. Credit Report and Miscellaneous Expenses: You may choose to obtain a copy of your credit report before filing for Chapter 13 bankruptcy to ensure that all your debts are included in your bankruptcy petition. Additionally, there may be other miscellaneous expenses associated with your bankruptcy case, such as postage and notary fees.
6. Plan Confirmation Hearing Costs: Preparing for and attending the plan confirmation hearing may also entail expenses related to legal representation or additional paperwork.
7. Ongoing Monthly Payments: In a Chapter 13 bankruptcy, you are required to make regular monthly payments as specified in your approved repayment plan. These payments go toward repaying your creditors over a period typically ranging from three to five years.

Consulting with an experienced bankruptcy attorney is highly advisable when considering Chapter 13 bankruptcy. An attorney can assess your financial situation, help you develop a feasible repayment plan, and guide you through the legal process, ensuring that you meet all requirements and address your specific financial needs effectively.

Reliable Bankruptcy Attorneys in Arkansas

Below is a list of reputable bankruptcy attorneys in Arkansas. They can help you with both personal and business bankruptcy information.

Niblock & Associates
5701 S University Ave, Little Rock, AR 72209, United States

Harris Law Firm
510 W 4th St, North Little Rock, AR 72114, United States

Dilks Law Firm
1008 Cumberland St, Little Rock, AR 72202, United States

wh Law
1 Riverfront Pl # 745, North Little Rock, AR 72114, United States

Kersten Lambert and Perry, PLLC
900 S Shackleford Rd #300, Little Rock, AR 72211, United States

Arkansas Zip Codes We Proudly Serve:

Little Rock

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