Bankruptcy Exemptions


Serving Clients Across Arkansas    

As experienced Arkansas Bankruptcy Lawyers, we know the Bankruptcy Exemption rules are critical to anyone considering Bankruptcy protection.  Not to worry though, because we at Niblock & Associates understand these rules inside and out! Exemption Rules protect certain items of property from the Chapter 7 Trustee’s ability to take and sell it to pay your debt. Also, it keeps the Chapter 13 Trustee from requiring you to pay the property’s equity into a Plan of Reorganization.

Most folks our Firm represents in Bankruptcy can fit all their property into an Exemption.  Even in the unusual situation where all your property cannot be exempted, there are ways to protect that property, if you know how, which is why you need the experienced Arkansas Bankruptcy Team of Niblock & Associates. 

If you have continuously resided in Arkansas for two (2) years or more, you are allowed to elect either the Arkansas Constitutional Exemptions or the Federal Exemptions, you cannot mix between the two. Usually, the Federal Exemptions are best to use, unless you have substantial equity in your home. The provisions of both are discussed below.

A. Arkansas Constitutional Exemptions. You may exempt your homestead, if during the course of owning the homestead, you were/are married or had/have dependents, regardless of value, subject to acreage restrictions. The acreage restrictions are one quarter (1/4) of an acre for urban property and eighty (80) acres for rural property. Additionally, you may exempt your clothes, and up to $500 of any other personal property if you are married or have dependents or $200 if single with no dependents. 

B. Federal Exemptions. The Federal Exemptions have a list of categories of property that can be exempted and a value limitation for each item of property. One important point about the Federal Exemptions is, if you and your spouse are both filing you may double the exemptions; in other words, if an exemption is $100, and, you and your spouse are filing, the combined exemption is $200. The Federal Exemptions periodically change; and it is important to talk to the Experienced Team at Niblock and Associates to make sure you are getting the most use out of your exemptions. 

If you have not been a resident of Arkansas continuously for the past two (2) years, which state’s exemption scheme applies in your situation is complex.  The question is, which state did you live in the most during the 6 months before the 2 years before filing Bankruptcy?  Therefore, you go back 2 1/2 years then come forward to 2 years.  You then figure out which state you lived in the most during that 6-month period, and whatever state you lived in the most is the state that will control your exemption scheme.

Like we said it can be very complex and what makes it worse, is every state is different, so what could be exempt for folks who lived in Arkansas longer, may not be the same for someone who just moved here from Texas or even California. Of course, our experienced Arkansas Bankruptcy Lawyers know how to make the calculations and determine exactly what exemptions apply to your situation.

Chapter 7 Dischargeable Debts

View the link above to find out about what debts are dischargeable during Chapter 7 Bankruptcy.

Non-Dischargeable Debt

Certain debts are not dischargeable or, non-dischargeable and will still be owed after going through the Bankruptcy process unless it is paid through the Bankruptcy process. The most common non-dischargeable debts are as follows:

  1. Taxes, with very limited exceptions;
  2. Alimony, maintenance, or support (also child support);
  3. Criminal fines, tickets, criminal hot checks, or restitution;
  4. Damage resulting from driving while intoxicated;
  5. Some property-debt division Orders in a divorce;
  6. Some debt incurred within ninety (90) days of the date of filing;
  7. Student loans guaranteed by the Government, with very limited exception (undue hardship); or
  8. Debt obtained by fraud.

Criminal Fines, Tickets, Hot Checks

Bankruptcy does not affect Criminal Fines, Restitution, Tickets or Criminal Hot Checks.  You must comply with whatever the criminal justice system requires you to do. Filing Bankruptcy will not stop any of the Criminal Court’s orders.  

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