If you are facing serious financial hardship, you may be thinking about filing for bankruptcy. There are several different kinds. The most common type of bankruptcy in Arkansas is what’s known as Chapter 7 Bankruptcy. Only certain people qualify for Chapter 7 bankruptcy, however.
If your monthly income is more than the median for the state of Arkansas, you must pass what’s called a “means test" to show that you’re not abusing the Chapter 7 Bankruptcy process. The law presumes that it’s abuse if your average monthly income over 5 years, with certain exceptions, is more than $12,475 or 25% of the your unsecured debt. (Assuming that amount is at least $7,025.)
You can rebut a presumption of abuse only by a showing of special circumstances that justify additional expenses or adjustments of current monthly income. If you can’t overcome this, you’ll have to file another type of bankruptcy.
Another thing that will prevent you from filing a Chapter 7 Bankruptcy is one of the following two things. First, if you’ve had a bankruptcy dismissed in the last 180 days. Second, if you have not received approved credit counseling within the last 180 days, you’re not eligible.
To file for an Chapter 7 Arkansas Bankruptcy, you can be an individual, partnership, or a business entity. It doesn’t matter how much debt that you have. The point of a Chapter 7 Bankruptcy is to give you a fresh start by getting rid of your debt. (There are some kinds of debts that you can’t discharge, however, like student loans or property liens.)
If you’re thinking about filing for an Arkansas Chapter 7 Bankruptcy, you probably have a lot of questions. That’s why we’re here. There’s a lot of issues that may come up that we just can’t cover in a blog post. We understand bankruptcy law, and we would love to offer you a free consultation to discuss your options.
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