Arkansas Bankruptcy Exemptions

For couples filing for bankruptcy protection, each person can claim a full set of exemptions unless otherwise noted. The State of Arkansas does have federal exemptions available.

There are some limits on certain exemptions such as equity that you have in a home or in a vehicle. The difference between the cost of the item and the amount owed on the item is the definition of equity. If the item, such as home or vehicle, is secured by a loan and payments are made on time, the equity is protected by your exemptions. If you choose to keep the property, continual timely payments ensure that the property is protected through the bankruptcy.

There are certain possessions that can be exempt or protected from creditors when filing for bankruptcy in Arkansas. Some debts cannot be wiped away in bankruptcy; however, there is property that can be kept.


Homestead: Choose one of the two options - If you have lived in Arkansas for at least 40 months, head of family may claim up to $2,500 for up to one fourth of an acre in city, village, or town; or up to 80 acres elsewhere. This exemption is found in the Arkansas Constitution 9-3, 9-4, & 9-5. If you have lived in Arkansas for less than 40 months, the same provisions as above, except total is limited to $125,000 by federal law. Real or personal property used as a residence up to $800 if single; $1,250 if married.

Insurance: Life Insurance payments for those who depend on debtor for support, Disability, illness or unemployment benefits, Fraternal benefit society benefits, Stipulated insurance premiums, Annuity contract, Group life insurance, Mutual assessment life or disability benefits to $1,000, Life, health, accident or disability proceeds, whether paid or due.

Pensions: Tax-exempt retirement accounts- 401(k)s, 403(b)s, SEP and SIMPLE IRAs, Defined benefits plan, Profit sharing and money purchase plans, traditional and Roth IRAs to $1,095,000 per person, State police officers, School employees, Police officers and firefighters, Disabled police or firefighters, IRA deposits to $20,000 if deposited over 1 year before filing for bankruptcy.

Personal Property: (Husband and wife may double personal property), Clothing, Motor Vehicle up to $1,200, Wedding rings, prepaid funeral trusts, Burial plot to 5 acres if choosing option 2 under homestead, Health aids, Animal, crops, appliances, books, furnishings, household goods and musical, instruments to $425 per item, $9,300 total.

Wages: Earned but unpaid wages due for 60 days, but not less than $25 per week

Tools of Trade: (Husband and wife may double tools of trade), Implements, books and tools, up to $750

Public Benefits: Unemployment compensation, Worker’s compensation, Crime victim’s assistance, AFDC and aid to blind, disabled or aged

Miscellaneous: Business partnership property

Wild Card: $500 of personal property if married or head of household, $200 of personal property if not married

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