To file Chapter 13 bankruptcy in Arkansas, you complete a credit counseling session, gather detailed financial records, file a petition and proposed repayment plan with the U.S. Bankruptcy Court for either the Eastern or Western District of Arkansas, start making monthly payments to a trustee, attend a meeting of creditors, and finish a debtor education course before the court discharges your remaining eligible debts three to five years later. The filing fee is $313, and the case gives you an immediate automatic stay that stops foreclosure, repossession, garnishment, and most other collection activity while you catch up.
Confirm You Qualify Before You File
Chapter 13 is designed for people with regular income, which can come from wages, self-employment, a pension, Social Security, or any other steady source. You need enough predictable cash flow to fund monthly payments for three to five years.
Federal debt caps apply. Your nonpriority unsecured debts (credit cards, medical bills, personal loans) must total less than $526,700, and your secured debts (mortgages, car loans) must total less than $1,580,125.1United States Courts. Chapter 13 Bankruptcy Basics These caps adjust periodically, so verify current figures if you are close to either limit.
Two timing rules can block you. You cannot receive a discharge if you already received a Chapter 7 discharge within the past four years or a Chapter 13 discharge within the past two years, measured from the filing dates.2United States Bankruptcy Court. Prior Bankruptcy – How Soon Can I Get Another Discharge You cannot file at all if a prior bankruptcy was dismissed within the last 180 days because you failed to comply with court orders or failed to appear.3Office of the Law Revision Counsel. 11 USC 109 – Who May Be a Debtor
You also have to file in the right place. Venue rules require filing in the federal district where you have lived for the greater part of the 180 days before filing, which in practice means at least 91 of the last 180 days.4Office of the Law Revision Counsel. 28 USC 1408 – Venue of Cases Under Title 11 Arkansas has two bankruptcy districts, Eastern and Western, and your county of residence determines which courthouse handles your case.5United States Bankruptcy Court. Eastern and Western Districts of Arkansas
Complete Credit Counseling First
Before you can file, you must complete a credit counseling session with a nonprofit agency approved by the U.S. Trustee Program.3Office of the Law Revision Counsel. 11 USC 109 – Who May Be a Debtor The session must happen within 180 days before filing and can be done by phone or online. When you finish, the agency issues a certificate that gets filed with your petition. Skip this step and the court can dismiss your case.6United States Department of Justice. Credit Counseling and Debtor Education Information Most agencies charge $20 to $50 and must offer reduced fees for people who cannot afford the full price. The U.S. Trustee Program website lists approved providers for Arkansas.
Genuine emergencies allow you to file first and complete counseling within 30 days afterward, but you have to submit a certification explaining why you could not get it done ahead of time. The court can extend that window by 15 additional days for good cause.
Gather Your Records and Forms
The petition requires a complete financial snapshot. Pulling everything together before you start the forms will save time and reduce errors.
- Income records: pay stubs from the last six months, your most recent federal tax return (required by the court), and documentation of any other income such as rental payments or government benefits.
- Debt records: mortgage statements, car loan balances, credit card statements, medical bills, student loans, tax debts, and any court judgments against you.
- Asset records: property deeds, vehicle titles, bank and investment account statements, retirement balances, and life insurance policies with cash value.
- Expense records: monthly housing, utilities, food, transportation, insurance, childcare, and any court-ordered payments such as child support or alimony.
The core filing is the Voluntary Petition for Individuals Filing for Bankruptcy (Official Form B 101).7United States Courts. Voluntary Petition for Individuals Filing for Bankruptcy You also file a Summary of Your Assets and Liabilities that gives the court a high-level overview.8United States Courts. A Summary of Your Assets and Liabilities and Certain Statistical Information Beyond those, detailed schedules cover every asset, every creditor, your monthly income, and your monthly expenses. Official Form 122C-1 calculates your income relative to the Arkansas median, which determines whether your plan runs three or five years.
Choose Arkansas or Federal Exemptions
Exemptions decide which property you keep. Arkansas lets you pick between the state exemption system and the federal exemption system, but you cannot combine them.9Justia Law. Arkansas Code 16-66-217 – Election of Bankruptcy Exemptions Which set helps you more depends on what you own.
The Arkansas homestead exemption protects up to 80 acres of rural land, or a quarter-acre in a city or town, with no cap on the home’s equity value. That unlimited equity protection is the standout feature. For personal property, Arkansas protects up to $1,200 of equity in one motor vehicle, up to $750 in tools of your trade, all prescribed health aids, and all clothing. The wildcard is modest: $500 if you are married or head of household, $200 otherwise.
Under the federal system, the homestead exemption is $31,575 per filer and the motor vehicle exemption is $5,025.10Office of the Law Revision Counsel. 11 USC 522 – Exemptions The federal wildcard is far more generous: $1,675 plus up to $15,800 of any unused homestead exemption. If you rent and have no homestead to protect, you can shield up to $17,475 in property of your choosing. The federal system also covers up to $16,850 in household goods and $2,125 in jewelry.
The practical rule: if you own a home with significant equity, the Arkansas exemptions almost always win because of unlimited home equity protection. If you rent or have little equity, the federal exemptions give you much more room to protect a vehicle, cash, and other personal property.
File the Petition and Trigger the Automatic Stay
You file the petition, schedules, and credit counseling certificate with the U.S. Bankruptcy Court for either the Eastern or Western District of Arkansas based on your county. The filing fee for Chapter 13 is $313. If you cannot pay the full amount upfront, you can apply to pay in installments. The court does not waive the fee entirely in a Chapter 13 case.
The moment the petition is filed, the automatic stay takes effect. This court order immediately stops most collection activity against you, including foreclosure, vehicle repossession, wage garnishment, and creditor lawsuits.11Office of the Law Revision Counsel. 11 USC 362 – Automatic Stay For many filers, this breathing room is the most immediate reason to file.
Chapter 13 extends a version of the stay to people who co-signed your consumer debts, so creditors generally cannot pursue co-signers while your case is active. This protection is unique to Chapter 13 and not available in Chapter 7.12Office of the Law Revision Counsel. 11 USC 1301 – Stay of Action Against Codebtor The co-debtor stay can be lifted if your plan does not propose to pay the co-signed debt or if the co-signer actually received the benefit of the loan.
Build and File Your Repayment Plan
The proposed repayment plan goes in with your petition or within 14 days after.13Legal Information Institute. Federal Rule of Bankruptcy Procedure 3015 It spells out exactly what you pay each month and how that money gets divided among your creditors.
Plan Length
Plan length is tied to your household income relative to the Arkansas state median. Below the median, the plan runs three years (though you can request up to five). At or above the median, the plan must run five years.1United States Courts. Chapter 13 Bankruptcy Basics Recent U.S. Trustee data puts the Arkansas median at $54,772 for a single-person household, with higher figures for larger households.14U.S. Trustee Program. Census Bureau Median Family Income by Family Size These medians update every few months, so check the current table before filing.
How the Plan Treats Different Debts
Payments are allocated by a strict hierarchy.
Priority debts must be paid in full. These include back child support, alimony, most tax debts, and the administrative costs of the bankruptcy itself (trustee fees and attorney fees).15Office of the Law Revision Counsel. 11 USC 1322 – Contents of Plan There is no negotiating these down.
Secured debts like mortgages and car loans get special treatment. Your plan can cure missed mortgage payments over its duration while you resume regular monthly payments going forward, and this is the main reason many people choose Chapter 13 over Chapter 7. You cannot modify the terms of a mortgage on your primary residence. For other secured debts, such as a car loan, you can sometimes reduce the loan balance to the vehicle’s current market value through cramdown. One catch: cramdown does not work on vehicles purchased within 910 days (roughly two and a half years) before filing. If you bought the car inside that window, you pay the full loan balance.
Unsecured debts like credit cards and medical bills receive whatever is left after priority and secured claims are covered. In many cases, unsecured creditors collect only a fraction, and the rest is wiped out at discharge. The plan must pass the “best interest of creditors” test, meaning unsecured creditors receive at least as much as they would have in a Chapter 7 liquidation of your nonexempt assets.
Setting the Monthly Payment
Your monthly payment is based on disposable income: what you earn minus reasonable living expenses. The court uses IRS National Standards to set allowable spending on food, clothing, and personal care rather than taking your figures at face value.16U.S. Trustee Program. IRS National Standards for Allowable Living Expenses Housing and transportation use local standards based on your county. If your income is above the Arkansas median, the plan must commit all your projected disposable income to creditors for the full five years.
Start Paying, Attend the 341 Meeting, Get Confirmed
You cannot wait for the judge to approve your plan before you start paying. Federal law requires you to begin making payments to the trustee within 30 days of filing your plan.17Office of the Law Revision Counsel. 11 USC 1326 – Payments You can pay the trustee directly or set up payroll deductions so your employer sends part of each paycheck straight to the trustee.1United States Courts. Chapter 13 Bankruptcy Basics Payroll deductions remove the temptation to spend the money before it is due.
After you file, the Chapter 13 trustee assigned to your case schedules a meeting of creditors, commonly called the 341 meeting. It is not a court hearing and no judge attends.18United States Department of Justice. Section 341 Meeting of Creditors The trustee puts you under oath and asks questions about your income, expenses, assets, and the accuracy of the information in your petition. Creditors are allowed to attend and ask questions, though most do not show up. The meeting usually lasts 10 to 15 minutes when your paperwork is in order.
Within 45 days after the 341 meeting, the bankruptcy judge holds a confirmation hearing to decide whether to approve your plan. The judge checks that priority debts are paid in full, secured creditors are treated properly, the plan commits enough of your income, and unsecured creditors receive at least what they would in a Chapter 7 liquidation. Creditors who object get a chance to raise those objections before confirmation. Once the judge approves the plan, it becomes binding on you and all your creditors.
Make Every Payment Through to Discharge
A Chapter 13 plan only works if you make every payment. The trustee collects the money and distributes it to creditors under the confirmed plan. The trustee’s own compensation comes out of those payments, up to a maximum of 10% of the funds distributed, though many districts set the rate lower.
If you fall behind, the trustee or a creditor can ask the court to dismiss your case. Dismissal ends the automatic stay, and everything that was frozen starts back up: foreclosure, repossession, wage garnishment, lawsuits. Any progress you made catching up on your mortgage or car payments can be lost. If your financial situation changes, tell your attorney immediately. The court can modify the plan to adjust payment amounts in response to a job loss, medical emergency, or other significant change. Modification is far better than letting the case collapse.
Before the court grants your discharge, you must complete a debtor education course, sometimes called a financial management course. This is separate from the pre-filing credit counseling and must be taken after you file.19United States Courts. Credit Counseling and Debtor Education Courses You file the certificate of completion (Official Form 423) no later than the date of your last plan payment. If you forget, the court will not grant your discharge even though you made every payment.
Once you complete all plan payments and file the certificate, the court discharges your remaining eligible debts, including credit card balances, medical bills, and personal loans that were not paid in full through the plan.20Office of the Law Revision Counsel. 11 USC 1328 – Discharge Certain debts survive and remain your responsibility. These include domestic support obligations like child support and alimony, most student loans, criminal restitution and fines, and debts arising from willful or malicious injury to another person. Long-term obligations such as a mortgage whose last payment falls after the plan ends also survive, because the plan only cured the arrears while you kept up with regular payments.
What Chapter 13 Costs in Arkansas
The total cost of a case has several components beyond the monthly plan payments.
- Filing fee: $313, payable upfront or in installments with court approval.
- Attorney fees: The Arkansas Chapter 13 Trustee’s guidelines set maximum “no-look” fees (pre-approved amounts that do not require detailed billing) at $4,300 for below-median-income cases and $4,750 for above-median-income cases. Business cases allow up to $5,250. Most of the attorney fee is paid through the plan, so you typically pay only a portion upfront.21Chapter 13 Trustee for Arkansas. Guidelines for Compensation for Services Rendered
- Credit counseling and debtor education: roughly $20 to $50 for each of the two required courses, generally under $100 combined.
- Trustee percentage: the trustee’s commission, up to 10% of your plan payments, is built into your monthly amount. Your attorney accounts for it when calculating the plan.
Because attorney fees and the trustee’s commission are paid through the plan, the main out-of-pocket costs before filing are the credit counseling fee, a portion of the attorney retainer, and the filing fee. Many Arkansas bankruptcy attorneys offer free initial consultations and will work out a payment arrangement for the retainer.