Debt Relief from Bankruptcy in Arkansas
Many people wonder what debts you do not have to pay back after a bankruptcy filing. The bankruptcy laws allow you to the following bankruptcy relief under the bankruptcy code:
- Credit Card Debt
- Medical Debt
- Car Loan
- Stop Wage Garnishment
- Stop Foreclosure
- Other Unsecured Debts
- Other Secured Debts
- Fair Credit Reporting Act (Negative items on your credit report must be removed)
Experienced Bankruptcy Attorney in Arkansas
We can assist you in answering questions concerning your money problems, outlining choices, and putting together a strategy that works best for you and your family.
Our Arkansas attorneys are here to assist you with your case whether you need a fresh start in your financial problems, have lost your job or received a pay cut, or are caught paying high-interest credit cards that prevent you from getting ahead.
Perhaps you have creditors calling you at all hours, leaving you feeling hopeless about your financial affairs. Regardless of your circumstances, whether you do not own property but have credit card debt, or whether you have complicated debt that includes property and other assets, our Arkansas bankruptcy lawyers can help.
When you need security for your house, automobile, or other investments, we are here to help.
Types of Bankruptcy in Arkansas
If you are having a hard time controlling your debt and are being harassed by creditors, the wh Law Bankruptcy team can guide you through the bankruptcy process and discuss the options available to your case. In Arkansas, there are two types of bankruptcy — Chapter 7 and Chapter 13. Our experienced bankruptcy attorneys can help you find the right bankruptcy solution for you and your family.
Chapter 7 Bankruptcy
A Chapter 7 bankruptcy is what some people refer to as the “short-and-sweet” form of bankruptcy. If you qualify for a Chapter 7 case, you may keep all of your property or have an interest in it, such as your home, vehicle, retirement accounts, and furniture.
Your debts would be wiped away, except for those debts you intend to continue paying, such as your mortgage and car note.
To qualify for Chapter 7 in Arkansas, your income and expenses must be considered. It’s not simply about your income; you need an expert bankruptcy attorney to help you see whether you qualify and if Chapter 7 is the appropriate option for you.
Chapter 13 Bankruptcy
If you’re behind on payments for a property you want to keep, such as your mortgage or automobile loan, Chapter 13 might be the best option for you. A Chapter 13 bankruptcy case is known as “reorganization,” which is not the same as a Chapter 7 case.
To qualify for a Chapter 13 bankruptcy case, you must have a regular source of income. From that income, you will be required to make monthly payments to a Chapter 13 trustee.
The trustee has no say in how the payments are applied toward your debt, as per Chapter 13. The trustee will follow the plan and pay creditors as directed by your Chapter 13 plan, which is submitted on your behalf.
In Chapter 13, you are shielded from creditors as long as you fulfill all of your obligations under the plan. Reorganization proceedings may take anything from thirty-six to sixty months to complete in order for you to catch up or pay off your debt.
You may be able to get rid of some or all of your unsecured debts, such as credit cards or medical bills. Chapter 13 can stop a pending foreclosure or garnishment of your wages.
Contact Bankruptcy Lawyers Today
Every situation is different. If you’re going through foreclosure, have a lot of medical debt, unsecured debts, or are losing your house income due to death or divorce, you’ll want the help of an experienced bankruptcy lawyer to figure out how to proceed.
When you call wh Law for a free bankruptcy consultation, a member of our bankruptcy team will evaluate your monthly living expenses and discuss whether Chapter 7 or Chapter 13 bankruptcy is the right option for you.
Our experienced attorneys understand that declaring bankruptcy is a challenging process and will work hard to make sure that you understand every element of your case and ensure that your bankruptcy goes as smoothly —with as little disruption to your life— as possible.
Contact an Arkansas Bankruptcy Attorney to personally review every bankruptcy petition to ensure accuracy and compliance with the United States Bankruptcy Code, which is complex and changes frequently. If necessary, we may be able to file your case the same day as your consultation. Contact wh Law today to schedule a free consultation.
Can I get a free consultation to discuss bankruptcy?
Yes. At wh Law | We Help, we offer free bankruptcy consultations. There is no cost to you for the consultation and you don’t have to file bankruptcy. We will simply evaluate your financial situation and determine if bankruptcy is the right for you. During a consultation with our law firm, our attorneys will be able to determine which chapter is right for you. (Chapter 7, Chapter 9, Chapter 11, Chapter 12, or Chapter 13). We will also let you know what it will cost to file and how much the bankruptcy is going to cost. You can set up a free bankruptcy consultation by calling us at 501.891.6000 or you can fill out our consultation request.
What is bankruptcy?
For most people, it is a legal process designed to help those who cannot pay their bills receive a fresh financial start, either by discharging debt through Chapter 7, through which many debts are wiped clean through a process that lasts only a few months, or through the completion of a “repayment” plan under Chapter 13 of the Bankruptcy Code, which lasts between three (3) to five (5) years.
When a bankruptcy petition is filed the “automatic stay” provision of the Bankruptcy Code prohibits your creditors from contacting you to try to collect money from you – at least until your debts are sorted out according to law, which assigns different debts specific classifications of priority by which most creditors are bound. The automatic stay that stops all lawsuits, foreclosures, garnishments, and other collection activity from the moment a bankruptcy petition is filed.
Who can file for bankruptcy?
The Bankruptcy Code permits any qualified person, partnership, corporation or business trust to file a case. If the debtor (person or entity who owes the money) files a petition to start the bankruptcy, it is a “voluntary” bankruptcy. If the creditors (people or entities to whom the money is owed) file a petition against a debtor to start the bankruptcy, it is an “involuntary bankruptcy.” When an involuntary case is filed, the debtor must contest the bankruptcy case within a certain time period to oppose the bankruptcy. Only married persons can file a joint petition; unmarried persons, corporations and partnerships must file separate cases. An individual with a business may not file a joint petition, but must instead file separate cases.
What does bankruptcy cost?
Your cost to file may vary depending on the Chapter you file under for bankruptcy relief, your financial circumstances, and the complexity of your case. The Cost with consist of fees to pay and the attorney’s fees for bankruptcy.
Currently, the filing fee charged by the court to file a Chapter 7 bankruptcy case is $335, whether you are filing individually or with your spouse. For an individual, the cost of the courses and credit reports are $57 total. This is the typical cost, although different cases can have different costs.
Under Chapter 13, the initial fee to file includes $310 that is paid to the Court to open the case, plus an additional $57 for the required classes and a comprehensive copy of your credit report.
Under certain circumstances, the Court may allow you to pay the filing fees ($335 or $310) in installments if you are unable to pay them all at once. Talk to us about whether an installment plan for filing fees is a good option for you. For additional information, please visit the U.S. bankruptcy court’s website.
Attorney’s Fees: Attorney’s fees are determined based on the individual circumstances of each Chapter 7 case and may vary depending on the existence of judgments, previous garnishment efforts, whether there are secured debts that the client wishes to reaffirm, etc. At wh Law | We Help, , our bankruptcy fees start at $500.00
What are the different “chapters”?
wh Law | We Help, , services all customers:
Chapter 7 — Liquidation Bankruptcy
Chapter 7 is the liquidation chapter of the Bankruptcy Code, and cases filed under Chapter 7 are commonly referred to as liquidation cases. This is what people commonly do when all their debt is gone when they complete the bankruptcy and they do not have to make payments. Chapter 7 requires a you to give up property which exceeds certain limits (“exemptions”) so the property can be sold or liquidated by the appointed Chapter 7 Trustee to pay creditors, and to keep property and avoid liquidation to pay unsecured creditors. In other words, “liquidation” is the sale of a debtor’s property for the purpose of distributing the sales proceeds to the debtor’s creditors. Potential debtors should realize that the filing of a petition under Chapter 7 may result in the loss of property.
Chapter 13 — Debt Repayment
Also known as a payment plan form of bankruptcy, Chapter 13 is the debt repayment chapter. In a Chapter 13 case, debtors may keep their property by repaying creditors over the life of a plan that may extend from 36 to 60 months. The length of the plan may be fixed by law, depending on the debtor’s income. When a debtor files Chapter 13, the debtor proposes to make monthly payments to a Chapter 13 Trustee, who in turn disburses funds to various creditors according to the Plan, once the Plan has been approved by the Court. Upon completion of the payment plan, most debts are discharged.
Chapters 9, 11, and 12
Other types of bankruptcy are set forth under Chapter 9, 11, and 12 and include:
Chapter 9 (“Municipal or Governmental Bankruptcy”) is only for municipalities and governmental units, such as schools, water districts and similar entities.
Chapter 11 (“Reorganization Bankruptcy”) this chapter generally provides for reorganization, usually involving a corporation or partnership. A chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time. The plan of reorganization which must be approved by the Court. In addition to the filing fee, a quarterly fee is paid to the U.S. Trustee in all Chapter 11 cases.
Chapter 12 is designed for “family farmers” or “family fishermen” with “regular annual income.” It enables financially distressed family farmers and fishermen to propose and carry out a plan to repay all or part of their debts. Under chapter 12, debtors propose a repayment plan to make installments to creditors over three to five years. Generally, the plan must provide for payments over three years unless the court approves a longer period “for cause.” But unless the plan proposes to pay 100% of domestic support claims (i.e., child support and alimony) if any exist, it must be for five years and must include all of the debtor’s disposable income. In no case may a plan provide for payments over a period longer than five years.
Which chapter do I need, and do I need an attorney to file?
Although the laws offer different options that may be available to a you, the decision to file, or under which chapter to file, depends on your situation.
Those who quality for either Chapter 7 or Chapter 13 have an advantage in that they are able to choose the type of bankruptcy that makes the most sense for their particular circumstances.
If a person can choose between Chapter 7 and Chapter 13, most people who file for bankruptcy choose to use Chapter 7 because Chapter 7 does not you require you to pay back your debts. But Chapter 13 may be a more attractive alternative for those who may have missed house payments and want to safely make up those missed payments over time, instead of losing their home in foreclosure.
Considering your personal facts, comparing them to each chapter’s requirements, and deciding which chapter to select, is considered legal advice. While it is possible to file bankruptcy “pro se,” or without legal representation, the decision of whether to file a bankruptcy and under what chapter is an extremely important decision and should be made only with competent legal advice from an experienced bankruptcy attorney after a review of all the relevant facts. Moreover, if you do file bankruptcy pro se, you must know that the Court is not permitted to give legal advice, assist with the preparation of forms, or assist you during various meetings and proceedings that may be scheduled in your case.
What can bankruptcy do for me?
It may make it possible for you to:
- Eliminate the legal obligation to pay most or all of your debts. This is called a “discharge” of debts. It is designed to “reset” your credit, so to speak, in order to allow you and your family a fresh financial start.
- Allow you to catch up on missed payments on your home or manufactured home and to avoid foreclosure while you do so. Bankruptcy does not eliminate your mortgage or other lien on your property, though, unless you pay the debt owed.
- Prevent repossession of a car or other property, if you file a case in a timely manner.
- Stop wage garnishment, debt collection harassment, and similar creditor actions to collect a debt.
- Restore or prevent termination of your utility services.
- Allow you to challenge the claims of creditors who have committed fraud or who are otherwise trying to collect more than you really owe.
Will bankruptcy affect my credit?
When a case is filed, the petition, schedules and other related documents become a matter of public record. Credit reporting agencies regularly collect information from bankruptcy cases to report on their credit reporting services. Bankruptcy may appear on your credit record for ten years from the date your case was filed, pursuant to the Fair Credit Reporting Act, 6 U.S.C. § 605, as opposed to the seven years other credit information may remain on a credit report.
For those with large or a high number of delinquent accounts, the credit score may already be so low that a bankruptcy may actually help. Because it wipes out old debts, bankruptcy may free up income so that a consumer can pay current bills and obtain new lines of credit after filing bankruptcy. The decision whether to grant you credit in the future is strictly up to the creditor and varies from creditor to creditor depending on the type of credit requested.
Debts discharged should only be listed as having a balance of $0, with no remaining balance owed on the debt. Debts incorrectly reported as having a balance owed will negatively affect the credit score and ability to get credit after the case is discharged. Everyone should regularly review his or her credit report, before and after bankruptcy, to resolve any disputes in debts reported with the various credit bureaus.
The three main credit Reporting Agencies are:
P.O. Box 9558
Allen, TX 75013
Attn: Public Records Department
555 West Adams Street
Chicago, IL 60661
P.O. Box 740241
Atlanta, GA 30374