How to File Bankruptcy in Arkansas
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.
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.