Arkansas Bankruptcy Many people are finding themselves in a difficult financial
situation with the current economic state. With lay offs at an all time
high, people are finding themselves falling behind on their bills. Many
people are unable to make payments on such things as car loans,
mortgages and credit cards. For many of these people, they have no way
of rising above this to become current. The one option people in this
situation may have is to file bankruptcy.
Types of Bankruptcy Bankruptcy laws are determined by the Federal government but
mandated by each State separately. Most states have their own
bankruptcy courts. In all States, there are three types of bankruptcy.
The first is Chapter Seven which is personal bankruptcy as is Chapter
Thirteen. In Chapter Thirteen bankruptcy you state that you will pay
off some of your debt within the bankruptcy proceedings, in Chapter
Seven all your debts are included and you are not required to pay any
of them off. Chapter Eleven bankruptcy is for businesses.
Debts Released in Bankruptcy
There are certain debts that are not able to be released during a
bankruptcy proceeding. These debts include, child support, alimony,
certain taxes and fines, certain student loans, loans in which you
knowingly gave false information, debts that came out of "malicious and
harmful" form, mortgages and liens that unless the property is sold in
the bankruptcy hearing. Other debts such as credit cards, personal
loans, and some mortgages will be released during pregnancy. In some
bankruptcy cases, you may even be able to keep your property after you
have filed bankruptcy. Chapter Seven will allow you to keep property if
the property is exempt, meaning it has a certain amount of equity. In
Chapter Thirteen you can keep your property if your repayment plans
meet the bankruptcy requirements.
Process length The bankruptcy process in Arkansas can be a time consuming
process. Filing for bankruptcy will cost $200 for Chapter Seven or $175
for Chapter Thirteen. Once you have filed the paperwork, you may be
required to go to court. In most cases, you would only have to go to
one meeting in court called the "meeting of the creditors". You would
be meeting with a trustee and any creditors who actually show up. Once
you have filed, this proceeding takes place about 30-40 days after the
filing. Sometimes, a creditor will file a motion that requires you to
appear in court again, though this is rare.
Effect on credit For most people, their credit is already in bad shape before
they file bankruptcy because they have not been paying their bills. So
in turn, your credit is already bad so having a bankruptcy won't affect
it that much, though it does have a very negative impact. Your filing
bankruptcy will stay on your credit report for ten years. Because your
debt will be wiped away, you will be in a better position to pay the
debt. Obtaining new loans and credit cards is possible, but you will be
paying a much higher interest rate.