In Arkansas, Chapter 7 Bankruptcy

Posted by Alan Finkel on June 7th, 2023

You want to declare bankruptcy in Arkansas. The process, qualification, prices, risk of losing belongings, benefits and downsides, and alternatives are the most crucial things to learn. The goal of this post is to provide this information as well as personalized information from our bankruptcy calculators based on your specific scenario.

To begin, you need be aware that bankruptcy is a legal debt relief alternative. It can assist you in getting out of debt, protecting you from creditors, and giving you a fresh start. In actuality, there were 5,896 from in Arkansas for the fiscal year ending June 30th, 2021.  You may even be able to save for retirement after filing for bankruptcy.

Chapter 7 Bankruptcy Eligibility

To be qualified for Chapter 7 bankruptcy, you must meet a few eligibility requirements. If you have already filed for Chapter 7 bankruptcy, you must wait at least eight years before filing again.

If you have filed for Chapter 13, you must wait six years before filing for Chapter 7. However, if you attempted a Chapter 13 payment plan in good faith and paid at least 70% of the unsecured claims, you may be entitled to file sooner.

The most crucial condition for eligibility is the "means test." This test compares your monthly income to the median income of similar-sized households in Arkansas. If your monthly income is less than the median, you may qualify for Chapter 7 bankruptcy.

You may or may not be eligible if your income exceeds the median. In this case, the test asks you to deduct certain necessary expenses from your monthly income in order to calculate your monthly disposable income. You are not qualified for Chapter 7 if you have adequate disposable income to pay off 25% of your unsecured debt. Instead, you might need to file for Chapter 13 bankruptcy. You may be eligible if you have little to no disposable money.

If you believe you are eligible for Chapter 7 bankruptcy, contact The Law Group of Northwest Arkansas LLP in Fayetteville, Arkansas. One of our knowledgeable bankruptcy lawyers will thoroughly analyse your Chapter 7 eligibility. While our office is in Northwest Arkansas, we serve customers across Arkansas, and our attorneys are also licenced in Missouri, Oklahoma, Tennessee, and Virginia.

Other Chapter 7 Requirements: Debt Counselling

You must be aware of other procedures before filing for Chapter 7 bankruptcy. You must complete credit counselling provided by a federally certified organization during the six months preceding your filing. This must be completed prior to filing, but it cannot be older than six months, so timing is critical.

Following your filing, you must fulfil a second educational criterion. You must take a personal financial management course to learn how to handle money and prevent getting into too much debt in the future. This course is also known as a debt management course or a debtor education course prior to discharge.

There are a few exceptions to both of these requirements. However, if you are concerned about your ability to finish these counselling sessions, consult with an Arkansas Chapter 7 Bankruptcy Lawyer in Cabot.