Arkansas Bankruptcy Guide

Arkansas Bankruptcy Overview

Arkansas offers robust protections for bankruptcy filers, including an unlimited homestead exemption on qualifying property and the ability to choose between state and federal exemptions. Understanding Arkansas's specific requirements and exemption options is essential for protecting your assets during bankruptcy proceedings.

One key advantage Arkansas offers is the choice between state exemptions and federal bankruptcy exemptions—you can select whichever set of exemptions better protects your property. This guide covers everything you need to know about filing Chapter 7 or Chapter 13 bankruptcy in Arkansas, including median income thresholds, exemption limits, and court locations.

2026 Arkansas Median Income for Chapter 7 Bankruptcy

To qualify for Chapter 7 bankruptcy in Arkansas, your household income must generally be at or below the state median income for your household size. If your income exceeds these thresholds, you may still qualify through the means test or may need to file Chapter 13 instead.

Arkansas Bankruptcy Exemptions: State vs. Federal

Arkansas is one of the states that allows you to choose between Arkansas state exemptions or federal bankruptcy exemptions. You cannot mix and match—you must choose one system or the other. Most Arkansas filers choose the system that better protects their specific assets.

Arkansas State Exemptions

Arkansas state exemptions are particularly generous for homeowners with significant equity in their primary residence.

Arkansas Homestead Exemption (State)

Unlimited value on up to 1/4 acre in a city, town, or village, or up to 80 acres elsewhere (160 acres for married couples).

Arkansas offers one of the most protective homestead exemptions in the United States—unlimited dollar value as long as your property meets the acreage requirements. Whether your home is worth $75,000 or $750,000, the equity is fully protected under Arkansas law if it qualifies as your homestead.

The acreage limits are:

• Urban Property: Up to 1/4 acre (approximately 10,890 square feet) if located in a city, town, or village
• Rural Property: Up to 80 acres for a single person, or 160 acres for married couples filing jointly

Arkansas Vehicle Exemption (State)

Up to $1,200 in value (or $20,000 if the vehicle is specially equipped for someone with a disability).

Arkansas's standard vehicle exemption is quite limited at only $1,200 of equity. This is one of the lower vehicle exemptions in the nation. If you have a vehicle with more than $1,200 in equity (value minus what you owe), you may want to consider using federal exemptions instead, which offer a $4,450 vehicle exemption plus a $1,475 wildcard that can be applied to a vehicle.

However, if the vehicle has been modified or specially equipped for a person with a disability, Arkansas allows up to $20,000 in protected equity—a much more generous exemption.

Arkansas Personal Property Exemptions (State)

Arkansas provides specific exemptions for various types of personal property:

• Household Goods and Furnishings: Up to $500 per item, $10,000 total for clothing, appliances, books, household furnishings, and other household goods
• Jewelry: Up to $2,500 (including wedding rings)
• Firearms: Unlimited protection for firearms kept at home for personal use, hunting, and sport
• Tax-Exempt Retirement Accounts: Unlimited protection for IRAs (subject to federal limits around $1.5 million), 401(k)s, pensions, and other qualified retirement plans
• Life Insurance: Unlimited cash value if owned for at least 3 years; proceeds if beneficiary is spouse or child
• Tools of Trade: Up to $7,500 for equipment, tools, books, and implements used in your profession or trade
• Wildcard Exemption: Up to $500 that can be applied to any property of your choice

Arkansas Wage and Income Exemptions (State)

• Wages: 60 days of earned but unpaid wages are fully exempt
• Social Security Benefits: Unlimited protection
• Veterans Benefits: Unlimited protection
• Unemployment Benefits: Unlimited protection
• Workers' Compensation: Unlimited protection
• Disability Benefits: Unlimited protection
• Public Assistance: Unlimited protection for state public assistance benefits

Federal Bankruptcy Exemptions (Alternative)

Instead of using Arkansas state exemptions, you can elect to use the federal bankruptcy exemptions. These may be more favorable if you don't own a home, have significant vehicle equity, or have diverse assets.

Federal Homestead Exemption

Up to $27,900 ($55,800 for married couples filing jointly).

The federal homestead exemption is much lower than Arkansas's unlimited state exemption. If you own a home with significant equity, Arkansas state exemptions are almost always the better choice. However, if you're a renter or have minimal home equity, federal exemptions might offer better overall protection for your other assets.

Federal Vehicle Exemption

Up to $4,450 in value.

The federal vehicle exemption is significantly higher than Arkansas's $1,200 state exemption. If you have a vehicle worth $4,000-$5,000 with minimal debt, federal exemptions can better protect it.

Federal Wildcard Exemption

Up to $1,475, plus up to $13,950 of any unused homestead exemption.

The federal wildcard is much more generous than Arkansas's $500 state wildcard. If you don't use the full federal homestead exemption (because you rent or have a low-value home), you can apply up to $13,950 of the unused portion to any property—vehicle equity, bank accounts, tax refunds, etc. This makes federal exemptions very attractive for renters.

Other Federal Exemptions

• Household Goods: Up to $700 per item, $14,875 total
• Jewelry: Up to $1,875
• Tools of Trade: Up to $2,800
• Retirement Accounts: Unlimited for most qualified plans

Arkansas Bankruptcy Courts and Locations

Arkansas is divided into two federal bankruptcy court districts: the Eastern District and the Western District. Where you file depends on where you live or where your business is primarily located.

Eastern District of Arkansas

The Eastern District covers the eastern half of the state and has three courthouse locations:

• Little Rock: 300 West Second Street, Little Rock, AR 72201 (Main Courthouse)
• Jonesboro: 615 South Main Street, Jonesboro, AR 72401
• Pine Bluff: 100 East Eighth Avenue, Pine Bluff, AR 71601

Western District of Arkansas

The Western District covers the western half of the state and has four courthouse locations:

• Fayetteville: 35 East Mountain Street, Fayetteville, AR 72701
• Fort Smith: 46 South Sixth Street, Fort Smith, AR 72901
• Hot Springs: 100 Reserve Street, Hot Springs, AR 71901
• El Dorado: 100 East Cypress Street, El Dorado, AR 71730

Cost of Filing Bankruptcy in Arkansas

The total cost of filing bankruptcy in Arkansas includes both court filing fees and attorney fees. Here's what to expect:

Court Filing Fees (2026)

• Chapter 7: $338
• Chapter 13: $313

These fees are set by federal law and are the same nationwide. In Chapter 7, you may be able to request a fee waiver if your income is below 150% of the federal poverty line, or you may request to pay the filing fee in installments over 120 days.

Attorney Fees in Arkansas

Attorney fees for bankruptcy in Arkansas vary by location, case complexity, and the attorney's experience. Here are typical ranges by city:

• Little Rock: $1,000 - $1,700 for Chapter 7; $2,800 - $4,000 for Chapter 13
• Fort Smith: $900 - $1,500 for Chapter 7; $2,500 - $3,800 for Chapter 13
• Fayetteville: $900 - $1,600 for Chapter 7; $2,500 - $3,800 for Chapter 13
• Springdale: $900 - $1,500 for Chapter 7; $2,500 - $3,700 for Chapter 13
• Jonesboro: $850 - $1,400 for Chapter 7; $2,400 - $3,500 for Chapter 13
• Rogers: $900 - $1,500 for Chapter 7; $2,500 - $3,700 for Chapter 13

Chapter 13 attorney fees are typically paid through your repayment plan over 3-5 years, making bankruptcy more accessible even if you cannot afford the full fee upfront. Many Chapter 7 attorneys also offer payment plans for their fees.

Arkansas-Specific Bankruptcy Considerations

Arkansas Property Tax Relief and Homestead Credits

Arkansas offers property tax relief programs for qualifying homeowners, including elderly and disabled residents. Filing bankruptcy does not affect your eligibility for these programs. If you're receiving a homestead property tax credit or are enrolled in the Property Tax Relief Program, you can continue to receive these benefits during and after your bankruptcy case.

Firearms Exemption in Arkansas

Arkansas is unique in offering unlimited protection for firearms kept at your home for personal use, hunting, and sport under state exemptions. This is one of the most generous firearms exemptions in the country. If you own valuable firearms, using Arkansas state exemptions rather than federal exemptions will provide better protection.

Mobile Homes and Manufactured Housing

In Arkansas, a mobile home or manufactured home can qualify for the unlimited homestead exemption if it is your primary residence and is on property you own that meets the acreage requirements (1/4 acre in cities or 80/160 acres rural). If the mobile home is in a mobile home park on rented land, the home itself may still qualify for protection under personal property exemptions, though you won't have the unlimited homestead protection.

Married Couples and Exemptions

Married couples filing jointly in Arkansas can sometimes double certain exemptions (like the $500 wildcard, giving them $1,000 total), but the homestead exemption is not doubled—it's already increased to 160 acres for married couples in rural areas. When choosing between state and federal exemptions, married couples must both use the same system—you cannot have one spouse use state exemptions and the other use federal exemptions.

Arkansas Bankruptcy FAQs

Should I use Arkansas state exemptions or federal exemptions?

The choice depends on your specific assets. Use Arkansas state exemptions if: you own a home with equity exceeding $27,900, you own valuable firearms, or your vehicle has minimal equity. Use federal exemptions if: you're a renter, you have a vehicle worth $3,000-$6,000 with little debt, or you have diverse personal property and want the larger wildcard exemption. An Arkansas bankruptcy attorney can analyze your situation and recommend the better option.

How long does Chapter 7 bankruptcy take in Arkansas?

A typical Chapter 7 bankruptcy case in Arkansas takes about 4-6 months from filing to discharge. The 341 Meeting of Creditors usually occurs 30-45 days after filing, and the discharge is typically granted 60-90 days after the meeting, assuming no complications or objections arise.

Can I keep my home in Arkansas bankruptcy with unlimited homestead protection?

Yes, in most cases. Arkansas's unlimited homestead exemption means you can keep your home regardless of its value, as long as it's on qualifying acreage (1/4 acre in cities, 80 acres single/160 acres married in rural areas) and you've owned it for at least 1,215 days. You must continue making mortgage payments if you have a home loan. If you're behind on mortgage payments, Chapter 13 may be a better option to catch up while keeping your home.

What happens if my property exceeds Arkansas's acreage limits?

If your rural property exceeds 80 acres (or 160 acres for married couples), only the first 80/160 acres (including your residence) are protected by the unlimited homestead exemption. The equity in excess acreage could potentially be liquidated by the bankruptcy trustee in Chapter 7. If you have substantial land holdings, consult with an Arkansas bankruptcy attorney about Chapter 13 or selling off excess acreage before filing.

Is my car protected if it's only worth $1,200 in Arkansas?

Under Arkansas state exemptions, you can protect up to $1,200 of vehicle equity. If your vehicle is worth more, consider using federal exemptions instead, which protect $4,450 in vehicle equity plus up to $1,475 wildcard (total of $5,925 for a vehicle). Alternatively, if you owe money on a car loan that reduces your equity below $1,200, the vehicle is protected even under state exemptions.

Can I file bankruptcy on my own in Arkansas without an attorney?

While it's legally possible to file bankruptcy without an attorney (called filing "pro se"), it's generally not recommended. Bankruptcy law is complex, and Arkansas's choice between state and federal exemptions makes the decision-making process even more important. Mistakes can result in losing property you could have protected, having your case dismissed, or being denied a discharge. Most Arkansas attorneys offer free or low-cost initial consultations.

How does bankruptcy affect my credit score in Arkansas?

Bankruptcy will negatively impact your credit score initially, typically dropping it by 130-200 points for those with previously good credit. A Chapter 7 bankruptcy remains on your credit report for 10 years, while Chapter 13 remains for 7 years. Many Arkansas filers find they can qualify for new credit within 2-3 years after discharge, especially if they practice good credit habits post-bankruptcy.

Will I lose my tax refund if I file bankruptcy in Arkansas?

Tax refunds can be protected in Arkansas bankruptcy using available exemptions. Arkansas state exemptions offer a $500 wildcard, while federal exemptions offer up to $15,425 in wildcard protection (if you don't claim the full homestead). The Earned Income Tax Credit (EITC) portion of a refund has additional federal protections. Many Arkansas attorneys recommend filing at a strategic time relative to tax season to maximize protection of refunds.

How much does it cost to file bankruptcy in Arkansas?

The court filing fee is $338 for Chapter 7 and $313 for Chapter 13. Attorney fees in Arkansas typically range from $850-$1,700 for Chapter 7 and $2,400-$4,000 for Chapter 13, depending on your location and case complexity. Many attorneys offer payment plans, and Chapter 13 attorney fees are usually paid through your repayment plan over time.

Can married couples file bankruptcy together in Arkansas?

Yes, married couples can file a joint bankruptcy petition in Arkansas. When filing jointly, both spouses must choose the same exemption system (both state or both federal). Joint filing often costs only slightly more than a single filing but discharges debts for both spouses. Whether to file jointly or separately depends on your specific debt situation and which spouse owes which debts.

What happens to my firearms in Arkansas bankruptcy?

If you choose Arkansas state exemptions, firearms kept at home for personal use, hunting, and sport receive unlimited protection. This is one of Arkansas's most generous exemptions. If you choose federal exemptions instead, firearms would fall under household goods (up to $700 per item, $14,875 total), which provides less protection for valuable gun collections. Gun owners typically benefit from choosing Arkansas state exemptions.

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