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Filing Chapter 7 Bankruptcy in Arkansas (2026)

Reviewed by DocDraft Legal Team · Arkansas · Last updated August 18, 2026

Chapter 7 bankruptcy is federal law, but the property you keep depends on Arkansas. Arkansas is a choice state: you may elect either the federal exemptions under 11 U.S.C. 522(d) or the Arkansas state exemptions, but you cannot combine the two lists. Arkansas is distinctive because its state homestead has no dollar cap and is instead limited by acreage under Article 9 of the Arkansas Constitution, while its state personal-property exemption is unusually low, so many filers choose the federal set. This page explains the Arkansas homestead and vehicle exemptions, the federal alternative, the means-test median income, and the two federal bankruptcy courts where Arkansans file. Chapter 7 discharges most unsecured debt but not most student loans, recent taxes, child support, or alimony.

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Does Arkansas use state or federal bankruptcy exemptions?

Arkansas is a choice state. When you file bankruptcy in Arkansas you may elect either the federal exemptions under 11 U.S.C. 522(d) or the Arkansas state exemptions, but you must pick one list in full and cannot mix them. Because Arkansas state personal property protection is very low, many filers choose the federal set.

Can I keep my house if I file Chapter 7 in Arkansas?

Often yes. The Arkansas homestead under Article 9 of the state constitution has no dollar cap and is limited only by acreage: up to 160 acres rural or 1 acre urban, never reduced below 80 acres rural or one-quarter acre urban. Alternatively the federal 522(d)(1) homestead protects $27,900 of equity, or $55,800 for a couple.

Can I keep my car if I file Chapter 7 in Arkansas?

Usually if equity is modest. The Arkansas motor vehicle exemption under Ark. Code 16-66-218 is $1,200. The federal alternative under 11 U.S.C. 522(d)(2) protects $4,450 of equity in one vehicle. Because the federal figure is larger, many Arkansas filers who want to keep a car choose the federal exemption set.

What is the income limit to file Chapter 7 in Arkansas?

For cases filed on or after July 15, 2026, the U.S. Trustee median income figures for Arkansas are $58,421 for one earner, $73,630 for two, $82,329 for three, and $97,054 for four, adding $11,100 per additional person. At or below your household figure, you pass the first part of the means test.

Arkansas Is a Choice State: Acreage-Based Homestead vs the Federal 522(d) Set

Arkansas is a bankruptcy choice state. A debtor filing in Arkansas may elect either the federal exemptions under 11 U.S.C. 522(d) or the Arkansas state exemptions, but must choose one list in its entirety and cannot combine them. What makes Arkansas distinctive is its homestead: under Article 9, sections 3 through 5 of the Arkansas Constitution and Ark. Code 16-66-210, the state homestead has no dollar ceiling and is instead capped by acreage. A rural homestead may reach 160 acres but is never reduced below 80 acres regardless of value, and an urban homestead may reach 1 acre but is never reduced below one-quarter acre. The trade-off is that the Arkansas constitutional personal-property exemption is unusually low, limited to $500 for a married debtor or head of family and $200 for a single debtor under Article 9, sections 1 and 2, and the Arkansas motor vehicle exemption under Ark. Code 16-66-218 is only $1,200. Because of that, filers with little home equity often prefer the federal 522(d) set, which offers a $27,900 homestead, a $4,450 vehicle exemption, and a wildcard. Arkansans file in one of two federal bankruptcy courts: the U.S. Bankruptcy Court for the Eastern District of Arkansas or the Western District of Arkansas, based on where they have lived for most of the prior 180 days.

Relevant Laws

Arkansas Homestead Exemption (Ark. Code 16-66-210; Ark. Const. Art. 9 secs. 3-5)

Sets the Arkansas homestead with no dollar cap, limited instead by acreage: up to 160 acres rural (never below 80 acres) or up to 1 acre urban (never below one-quarter acre), regardless of value. This is the exemption that lets many Arkansas homeowners keep their house and land in Chapter 7.

Arkansas Choice of Exemptions (11 U.S.C. 522(b); Ark. Const. Art. 9 secs. 1-2)

Arkansas has not opted out of the federal exemptions, so under 11 U.S.C. 522(b) a debtor may elect either the federal 522(d) list or the Arkansas state exemptions. The state constitution's low personal-property caps of $500 married and $200 single lead many filers to choose the federal set.

Arkansas Personal Property and Motor Vehicle Exemption (Ark. Code 16-66-218)

Provides the statutory Arkansas personal property exemptions, including a $1,200 motor vehicle exemption, plus tools of the trade and other categories. These statutory amounts are constrained by the Article 9 constitutional caps on personal property.

Federal Bankruptcy Code Exemptions and Means Test (11 U.S.C. 522, 707)

The federal law behind Chapter 7. Section 522(b) lets a debtor in a choice state like Arkansas elect the federal 522(d) exemptions instead of the state list, and section 707(b) sets the means test measured against state median income.

Regional Variances

Arkansas Chapter 7 Exemption Table

Homestead

Arkansas set (Ark. Code 16-66-210; Ark. Const. Art. 9 secs. 3-5): no dollar cap, limited by acreage, up to 160 acres rural (never below 80 acres) or 1 acre urban (never below one-quarter acre), regardless of value. Federal alternative (11 U.S.C. 522(d)(1)): $27,900 of equity, or $55,800 for a married couple. You use one list, not both.

Motor vehicle

Arkansas set (Ark. Code 16-66-218): $1,200 of equity in a motor vehicle. Federal alternative (11 U.S.C. 522(d)(2)): $4,450 of equity in one vehicle. Equity above the figure you elect may be reachable by the trustee.

Wildcard

Arkansas has no broad wildcard; personal property is capped by Ark. Const. Art. 9 secs. 1-2 at $500 for a married debtor or head of family and $200 for a single debtor. Federal alternative (11 U.S.C. 522(d)(5)): $1,475 plus up to $13,950 of any unused homestead amount, applied to any property.

Personal property

Arkansas set: household goods and personal property are constrained by the Article 9 caps of $500 married and $200 single (clothing is separately protected). Federal alternative (11 U.S.C. 522(d)(3)): household goods, furnishings, apparel, and appliances up to $700 per item and $14,875 in total.

Wages

Federal garnishment law (Consumer Credit Protection Act) caps ongoing garnishment at the lesser of 25 percent of weekly disposable earnings or the amount above 30 times the federal minimum wage. Under Ark. Code 16-66-208 a portion of a debtor's earnings for personal services is protected from execution.

Retirement and tools

ERISA-qualified plans such as 401(k)s are excluded from the bankruptcy estate under federal law, and IRAs are protected up to the federal cap. Under the federal set, 11 U.S.C. 522(d)(6) also exempts $2,800 in tools of the trade; the Arkansas statutory scheme protects tools of the trade within the Article 9 personal-property limits.

Suggested Compliance Checklist

Confirm the current Arkansas means-test median income

Before you file days after starting

Check your household size against the U.S. Trustee Arkansas median income figures in effect on your filing date, since these update periodically. For cases filed on or after July 15, 2026 the figures are $58,421 for one, $73,630 for two, $82,329 for three, and $97,054 for four, adding $11,100 per additional person.

Complete the pre-filing credit counseling course

Within 180 days before filing days after starting

Take an approved credit counseling course from a provider authorized for your Arkansas district and keep the certificate. You must file it with your petition. Skipping this can get your case dismissed before your debts are addressed.

Choose the federal or Arkansas exemption set and value your assets

Before preparing your schedules days after starting

Decide between the federal 522(d) list and the Arkansas list. The acreage-based Arkansas homestead favors landowners, while the federal set with its wildcard favors renters and low-equity filers. Value your home, vehicle, and personal property so you can match assets to exemptions. You must choose one list in full.

Prepare and file your petition and schedules

Filing day days after starting

File your petition, schedules, and exemption claims in the correct court: the U.S. Bankruptcy Court for the Eastern District of Arkansas or the Western District of Arkansas, based on where you have lived for most of the prior 180 days. Filing triggers the automatic stay that pauses collection and garnishment.

Attend the 341 meeting and finish the debtor education course

Before discharge days after starting

Attend the 341 meeting of creditors and answer the trustee's questions under oath, then complete the required post-filing financial management course and file the certificate. Both are required before the court will grant your discharge. An attorney can help with contested exemptions.

Frequently Asked Questions

The Arkansas homestead has no dollar cap. Under Article 9, sections 3 through 5 of the Arkansas Constitution and Ark. Code 16-66-210, it is limited by acreage: a rural homestead up to 160 acres, never reduced below 80 acres regardless of value, and an urban homestead up to 1 acre, never reduced below one-quarter acre. The alternative federal 522(d)(1) homestead is $27,900.

The Arkansas motor vehicle exemption under Ark. Code 16-66-218 is $1,200. If you elect the federal set instead, 11 U.S.C. 522(d)(2) protects $4,450 of equity in one vehicle. Because the federal figure is larger, filers who need to keep a financed or higher-equity car often choose the federal exemptions rather than the Arkansas list.

Arkansas state personal property protection is very low. The Arkansas Constitution, Article 9, sections 1 and 2, caps most personal property at $500 for a married debtor or head of family and $200 for a single debtor. The federal 522(d) set offers far broader household-goods, vehicle, and wildcard protection, so filers without large landholdings usually prefer it.

No. Chapter 7 discharges most unsecured debt like credit cards and medical bills, but it does not erase most student loans, recent income taxes, child support, or alimony, and it will not discharge debts from fraud. Secured debts like a car loan remain unless you surrender the collateral or reaffirm the loan.

Federal law excludes ERISA-qualified retirement plans such as 401(k)s from the bankruptcy estate, and IRAs are protected up to the federal cap. For wages, the federal Consumer Credit Protection Act limits garnishment to the lesser of 25 percent of weekly disposable earnings or the amount above 30 times the federal minimum wage, and the automatic stay pauses garnishment on filing.

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Asset Protection Planning in Arkansas (2026)

Dealing With Debt Collectors in Arkansas (2026)

How to Break a Lease in Arkansas Legally (2026)

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