A Short Introduction Arkansas Bankruptcy Law
Before Filing for Arkansas Bankruptcy
Individuals are required to get credit counseling no earlier than 180 days before filing for Arkansas bankruptcy. Though some exemptions are granted, they can only be applied for with the rest of your bankruptcy petition, and it will throw out your entire case is the exemption is not granted. The United States Department of Justice has a list of approved Arkansas credit counselors here:
All companies are required to have legal representation when filing for bankruptcy, and it is recommended that private individuals do as well because of the high consequences of incorrect filing. To find a pro bono legal service that can aid you for low or no cost, provided you are eligible, consult this list of Arkansas bankruptcy legal services: http://apps.americanbar.org/legalservices/probono/directory/arkansas.html.
Filing for Arkansas Bankruptcy
There are two locations available for the United States Bankruptcy Courts, the main court 300 W. Second Street in Little Rock and the Fayetteville branch at 35 E. Mountain. Most filings can also be done electronically. Additional courts located across the state may also be of use for finding forms and doing some official business.
There are many different forms that need to be filled out in order for you to file for bankruptcy. Besides the federal forms which can be found at the U.S. Courts website, there are local forms such as the affidavit and request to file, the intent to request redaction, and the matrix list waiver which may or may not be necessary depending on your filing needs. Those can be picked up at the nearest Arkansas Bankruptcy Court.
Corporate Arkansas Bankruptcy
Most businesses file for one of two types of Arkansas bankruptcy, depending mainly on their anticipated future revenue. These are the two types, called chapters:
• Chapter 7: This is the best option available for businesses who don’t anticipate ever being able to raise enough funds to become a profitable business. After the Arkansas bankruptcy is recognized by the Court, the bankrupt business’s assets are sold for money or liquidated and these funds then go towards paying creditors. Banks are given first crack at the money to get paid their loaned funds, then unsecured creditors such as bondholders get reimbursed, and finally stockholders, though there is seldom any money left for them.
• Chapter 11: Many companies find themselves unable to keep up debt payments but are hopeful that with some reorganization they may be able to become a profitable business. These companies file for Chapter 11 Arkansas bankruptcy, which allows for court overseen corporate restructuring as well as the construction of a debt repayment plan. Companies that have filed for Chapter 11 bankruptcy remain in possession of their assets (or their stockholder remain in possession, in the case of public companies).
Personal Arkansas Bankruptcy
Declaring personal Arkansas bankruptcy may be the best way for high-debt individuals to move on with their lives. These are the different personal options for Arkansas bankruptcy.
• Chapter 7: As with corporate bankruptcy, Chapter 7 allows for the liquidation of personal property to pay off debt. Therefore, individuals who own little may benefit the most from Chapter 7 Arkansas bankruptcy since they stand to lose little while absolving themselves of their debt, which is usually credit card debt or similar debt.
• Chapter 13: Individuals seeking Chapter 11 bankruptcy are usually not eligible for Chapter 7 because of the stringency of Arkansas bankruptcy law, which mandates that only people earning less than the state median can file for Chapter 7 or people who pass an Arkansas Means Test. Chapter 13 allows the individual to keep their property, but mandates that most of their discretionary income be used to pay creditors.
Arkansas Bankruptcy Courts don’t allot individuals suffering from severe tax debts many avenues to better their financial positions, since its governmental nature makes governments reluctant to absolve it. Sometimes, however, this occurs and you should contact an Arkansas Bankruptcy Lawyer to learn more about when this can happen.