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Arkansas Bankruptcy Exemptions for 2019


(Portions reprinted by permission from How to File for Chapter 7 Bankruptcy, Nolo © 1989-2019 )

Arkansas Bankrupcty Exemptions Summary

(details below...)

Federal Bankruptcy Exemptions Also Available
(see below)

Homestead

For married person or head of family: unlimited exemption on real or personal property used as residence to 1/4 acre in city, town, or village, or 80 acres elsewhere; if property is between 1/4 to 1 acre in city, town, or village, or 80-160 acres elsewhere, additional limit is $2,500; homestead may not exceed 1 acre in city, town, or village, or 160 acres elsewhere (husband & wife may not double)  (more...)

Auto/Truck (aka Motor Vehicle)

$200 is maximum personal property exemption allowed under the Arkansas Constitution, although the statute allows an exemption of $1,200. Courts have held that amounts in excess of the Arkansas constitution are unconstitutional.   (more...)

Personal Property

Clothing, wedding rings (see wild card). However, $200 is maximum personal property exemption allowed under the Arkansas Constitution, even if a statute allows more.    (more...)

Wild Card

Arkansas statute allows $500 of any personal property if married or head of family; $200 if not married. However, $200 is maximum personal property exemption allowed under the Arkansas Constitution, even if a statute allows more.   (more...)

Wage Garnishment Law

Earned but unpaid wages due for 60 days; in no event less than $25 per week   (more...)

More Arkansas Exemptions...

[Click here for more info & citations...]

Disclaimer

Disclaimer

Citations and links to primary law and secondary sources are provided for those who wish to do further research. Every effort has been made to make this information up to date and accurate, but laws can and do change without notice. Persons relying on this information are responsible for confirming its timeliness and accuracy before relying on it. (This information was updated for April 2019.)

Also bear in mind that these brief summaries do not list every detail or exception to these exemptions. For example, there are often exceptions for collection of child support debt and/or taxes. These listings are designed to inform you of laws that exist for your benefit, so that you may exercise what rights you may have.

Finally, this website is intended to provide information only. It cannot answer whether your property does or does not qualify for a specific exemption.

more...  

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Arkansas Homestead | Insurance | Retirement | Personal Property | Public Benefits | Tools of Trade | Wage Garnishment | Wild Card |

Arkansas Bankruptcy Exemptions

Arkansas Offers a Choice of Federal or State Exemptions

Arkansas law allows you to use the exemptions found in the U.S. bankruptcy code (11 U.S.C. § 522(d)) or the exemptions provided under Arkansas law. However, you cannot mix and match exemptions from the federal bankruptcy code and state law. You must choose one system or the other.

However, if you use the state law exemptions, there are a few U.S. 'non-bankruptcy' exemptions (that is, exemptions that exist outside of federal bankruptcy code) that you can use in addition to your state law exemptions. The four most significant non-bankruptcy exemptions are for:

  • Wages (a general cap on what percentage of your wages can be garnished)
  • Social Security benefits
  • Civil Service benefits, and
  • Veterans Benefits

Other non-bankruptcy exemptions mostly deal with various benefits to government and military personnel, with a few odd laws regarding specially regulated labor markets such as railroad workers, merchant sailors, and longshoremen.

NOTE: Federal Exemption amounts listed below reflect the April 1, 2019 adjustment for inflation every three years, and therefore do not match the figures shown in the federal exemption statutes. Click here for the April 1, 2019 inflation adjustments to Federal bankruptcy exemption amounts, published in the Federal Register.

Special Notes regarding Arkansas exemptions:

Note: In re Holt, 894 F.2d 1005 (8th Cir 1990) held that Arkansas residents are limited to exemptions in the Arkansas Constitution. Statutory exemptions can still be used in Arkansas for non bankruptcy purposes, but they cannot be claimed in bankruptcy. Constitution limits personal property exemptions to $200 in aggregate. This does not affect debtors using the Federal exemptions.

Can you double exemptions for joint filers? (General principles)

If you are married and filing together, you and your spouse must use the same law; one cannot use federal law while the other uses state law. However, the exemption law chosen applies separately to each spouse. Thus, it is generally possible to double the amount of state law exemptions, Cheeseman v. Nachman, 656 F.2d 60 (4th Cir. 1981) (married couple filing a joint petition was entitled to double the Virginia homestead exemption), unless state law (e.g. California) specifically prohibits a couple from doubling certain exemptions. See First National Bank v. Norris, 701 F.2d 902 (11th Cir. 1984)(Alabama); Granger v. Watson, 754 F.2d 1490 (9th Cir. 1985)(California).

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Arkansas Homestead | Insurance | Pensions | Personal Property | Public Benefits | Tools of Trade | Wage Garnishment | Wild Card |

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Arkansas Homestead Exemption

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Yahoo Real Estate offers comparable home sales in your neighborhood.

Almost every state provides protection for equity in the family home, and many states have increased the amount of protection in recent years. Seven states offer unlimited protection. Most states are not as generous.

Must choose option 1 or 2

New Federal Residency Requirement

Under the new bankruptcy law, you must be have lived in the state for at least 40 months (three years and four months) before you can claim any homestead protection greater than $160,375. (If your state's exemption offers less than this amount, the law is irrelevant to you.) The law is poorly worded but seems to say that if you move from one home to another in the same state, you can claim that state's homestead protection.

IF you are moving to another state, OR you moved to Arkansas within in the last two years, click here.

Special notes about Arkansas Homestead Exemptions: Must choose option 1 or 2

Federal Exemptions

  • Real property, including co-op or mobile home, or burial plot to $25,150; unused portion of homestead to $12,575 may be applied to any property
    11 U.S.C. 522 (d)(1), (d)(5)




    (retirement funds to the extent that those funds are in a fund or account that is exempt from taxation under section 401, 403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code of 1986)
    (For assets in individual retirement accounts described in section 408 or 408A of the Internal Revenue Code of 1986, other than a simplified employee pension under section 408(k) of such Code or a simple retirement account under section 408(p) of such Code)









    (Earned Income Tax Credit is federal no local, so not exempt)








Arkansas Exemptions

  • AR Exemptions
  • 1. For married person or head of family: unlimited exemption on real or personal property used as residence to 1/4 acre in city, town, or village, or 80 acres elsewhere; if property is between 1/41 acre in city, town, or village, or 80-160 acres elsewhere, additional limit is $2,500; homestead may not exceed 1 acre in city, town, or village, or 160 acres elsewhere (husband & wife may not double)
    Ark. Const. Art. 9, 3
    Ark. Const. Art. 9, 4
    Ark. Const. Art. 9, 5
    Ark. Code Ann. 16-66-210
    Ark. Code Ann. 16-66-218 (b)(3), (4)
    In re Stevens, 829 F.2d 693 (8th Cir. 1987)
  • 2. Real or personal property used as residence to $800 if single; $1,250 if married
    Ark. Code Ann. 16-66-218 (a)(1)

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Arkansas Homestead | Insurance | Pensions | Personal Property | Public Benefits | Tools of Trade | Wage Garnishment | Wild Card |


Tenancy by Entirety Exemption

Tenancy by the Entirety (TBE) is a form of property ownership, based on traditional English common law, that is still recognized in about 1/2 of states and the most common form of martial property ownership in many of them.

It protects property that is jointly owned by a married couple as an "entirety" -- which is to say, as a single marital entity, not as individuals.

Tenancy by the Entirety (TBE) was originally conceived as a debt shield -- a way of protecting wives and children from being left homeless and penniless as a result of the debts of a husband. Under the English common law TBE doctrine, a husband could not sell property owned by "the entirety", or give it away, or pledge it as security for a loan without the consent of his wife.

Today, 25 states still recognize some form of tenancy by the entirety, but they differ on the extent to which the property is exempt.

Special notes about Arkansas Tenancy by the Entirety Exemptions: Arkansas recognizes Tenancy by the entirety in both real and personal property, however, creditors can execute on each individual debtors interest in the property. Non-debtor spouse still retains rights of posession, survivorship, and half the rents and profits.

Federal Exemptions

Arkansas Exemptions

  • Not exempt. Tenancy by the entirety is recognized but debtor's interest in TBE property is not exempt.
    Morris v. Solesbee, 892 S.W.2nd 281 (Ark. App 1995)(not exempt, but non-debtor spouse retains rights of, possession, survivorship, and 1/2 rents & profits)

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Arkansas Homestead | Insurance | Pensions | Personal Property | Public Benefits | Tools of Trade | Wage Garnishment | Wild Card |


Arkansas Insurance exemptions

Virtually all states protect life insurance proceeds in some manner or another. Some restrict it to proceeds paid to a dependent. Many states also protect the cash-value or loan-value of insurance policies.

If a substantial amount of your assets are in life insurance, you may want to consult a professional to determine the extent to which those policies are exempt. The website AssetProtectionBook.com does particularly thorough job of covering Arkansas insurance exemptions.

Federal Exemptions

Arkansas Exemptions

  • Annuity contract
    Ark. Code Ann. 23-79-134
  • Disability benefits
    Ark. Code Ann. 23-79-133
  • Fraternal benefit society benefits
    Ark. Code Ann. 23-74-403
  • Group life insurance
    Ark. Code Ann. 23-79-132
  • Life insurance proceeds if clause prohibits proceeds from being used to pay beneficiary's creditors
    Ark. Code Ann. 23-79-131
  • Life insurance proceeds or avails if beneficiary isn't the insured
    Ark. Code Ann. 23-79-131
  • Life, health, accident, or disability cash value or proceeds paid or due to $500
    In re Holt, 97 B.R. 997 (W.D. Ark. 1988)
    Ark. Code Ann. 16-66-209
    Ark. Const. Art. 9, 1
    Ark. Const. Art. 9, 2
    In re Holt, 894 F.2d 1005 (8th Cir. 1990)
  • Mutual assessment life or disability benefits to $1,000
    Ark. Code Ann. 23-72-114
  • Stipulated insurance premiums
    Ark. Code Ann. 23-71-112

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Arkansas Homestead | Insurance | Pensions | Personal Property | Public Benefits | Tools of Trade | Wage Garnishment | Wild Card |


Miscellaneous other exemptions for Arkansas

This category covers items like partnership property, alimony & support payments.

Federal Exemptions

Arkansas Exemptions

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Arkansas Homestead | Insurance | Pensions | Personal Property | Public Benefits | Tools of Trade | Wage Garnishment | Wild Card |


Arkansas Pensions & Retirement Savings Exemptions

The new federal bankruptcy law now automatically exempts a virtually all tax-exempt pensions and retirement savings accounts from bankruptcy, even if you are using state law exemptions. 11 U.S.C. § 522(b)(3)(C). (See Help Topic: Special Rules For Retirement Accounts.)

The law protects up to $1,283,025 of any pension or retirement fund that qualifies for special tax treatment under Internal Revenue Code sections 401, 402, 403, 408, 408A, 414, 457, or 501(a).

Federal Exemptions

  • All types of retirement funds and accounts that tax-exempt under IRC section 401, 403, 408, 408A, 414, 457, or 501(a) ; IRAs & Roth IRAs limited to $1,362,800 (excluding rollover contributions); limitation can be overidden by judge.
    11 U.S.C. 522 (d)(12)
    11 U.S.C. 522 (n)

Arkansas Exemptions

  • Disabled firefighters
    Ark. Code Ann. 24-11-814
  • Disabled police officers
    Ark. Code Ann. 24-11-417
  • IRA deposits to $20,000 if deposited over 1 year before filing for bankruptcy
    Ark. Code Ann. 16-66-218 (b)(16)
  • Police officers
    Ark. Code Ann. 24-10-616
  • School employees
    Ark. Code Ann. 24-7-715
  • State police officers
    Ark. Code Ann. 24-6-205
    Ark. Code Ann. 24-6-223

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Arkansas Homestead | Insurance | Pensions | Personal Property | Public Benefits | Tools of Trade | Wage Garnishment | Wild Card |

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Arkansas Personal Property Exemptions

Auto Valuation Tools:

Kelley Blue Book

Edmunds

Both of these websites offer interactive tools to determine the current value of your used car.

This category covers your car, your non-retirement bank accounts, and most of your other personal possessions, other than your house.

States vary widely on how generous they are in this area. Some exemptions may be for any combination of property up to an aggregate amount. Other exemptions apply only to specific items, such as jewelry.

Remember that an exemption will not protect your car from being repossessed by the holder of the car loan you used to purchase the vehicle if you pledged the vehicle as security for the loan. To keep the car, you will have to pursue other options such as 'redemption' or 'reaffirmation.' See the help topics and How to File for Chapter 7 Bankruptcy for more on this.

Special notes about Arkansas Personal Property Exemptions: In re Holt, 894 F.2d 1005 (8th Cir 1990) held that Arkansas residents are limited to exemptions in the Arkansas Constitution. Statutory exemptions can still be used in Arkansas for non bankruptcy purposes, but they cannot be claimed in bankruptcy. Constitution limits personal property exemptions to $200 in aggregate. See also, In re Kelley, 455 B.R. 710, Bkrtcy.E.D.Ark.,2011. This does not affect debtors using the Federal exemptions.

Federal Exemptions

Arkansas Exemptions

  • Burial plot to 5 acres, if choosing Federal homestead exemption (option 2)
    Ark. Code Ann. 16-66-207
    Ark. Code Ann. 16-66-218 (a)(1)
  • Clothing
    Ark. Const. Art. 9, 1
    Ark. Const. Art. 9, 2
  • Prepaid funeral trusts
    Ark. Code Ann. 23-40-117
  • Statute allows exemption of Motor vehicle to $1,200. However, Ark. Constitution limits exemption to $200.
    Ark. Code Ann. 16-66-218 (a)(2)
    In re Kelley, 455 B.R. 710 (ED. Ark 2011)
  • Wedding rings
    Ark. Code Ann. 16-66-219

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Arkansas Homestead | Insurance | Pensions | Personal Property | Public Benefits | Tools of Trade | Wage Garnishment | Wild Card |


Arkansas Public Benefits Exemptions

Most states exempt public benefits, consistent with the notion that such benefits are intended as a safety net for the recipient.

Federal Exemptions

Arkansas Exemptions

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Arkansas Homestead | Insurance | Pensions | Personal Property | Public Benefits | Tools of Trade | Wage Garnishment | Wild Card |


Arkansas Tools of Trade Exemptions

These are the things you use to make a living. An automobile or truck can be a tool of trade if you use it as such. Commuting to work doesn't count, but if driving is a necessary component of transacting your business, you can claim your vehicle is a tool of trade.

Special notes about Arkansas Tools of Trade Exemptions: In re Holt, 894 F.2d 1005 (8th Cir 1990) held that Arkansas residents are limited to exemptions in the Arkansas Constitution. Statutory exemptions can still be used in Arkansas for non bankruptcy purposes, but they cannot be claimed in bankruptcy. Constitution limits personal property exemptions to $200 in aggregate. See also, In re Kelley, 455 B.R. 710, Bkrtcy.E.D.Ark.,2011. This does not affect debtors using the Federal exemptions.

Federal Exemptions

Arkansas Exemptions

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Arkansas Wage Garnishment Laws

Most states have a wage garnishment law. In some states, wage garnishment laws can be used in bankruptcy as an exemption to protect income that you had coming due, but not yet received, as of the day you filed, for work you had already done -- so called "earned but unpaid wages".

In some states, the wage garnishment law protects not only wages owed to you, but also wages already in your possession and saved over time preferably holding it in a separate bank account. In other states wage garnishment laws do not protect wages once they are they are in your possession.

There is a federal wage garnishment protection found in the CCPA (Consumer Credit Protection Act), 15 U.S.C. § 1673, which limits how much of your pay can be taken for collection purposes. But this law law is generally found not to be an exemptions in bankrupty. See, e.g. IN RE HORTON, Case No. 10-53495., Bankr. ED Kentucky, 3/4/2011

Some courts have also held that some state wage garnishment laws do not create an exemption in bankruptcy. See, eg. Utah, Tennessee, Vermont, Missouri.

Other courts have held that state garnishment statutes DO create an exemption. See, e.g., Oregon, Iowa, Ohio, Kansas, Indiana.

And in Illinois there are recent published bankruptcy court opinions going both ways on the issue of whether Illinios wage garnishment law can be used as an exemption in bankruptcy.

Click here for collected case law on the question: Do wage garnishment laws create an exemption in bankruptcy?

Finally, if you live in a state that lets you use the Federal bankruptcy exemptions in 522(d), and you choose to use them, then you get no exemption for earned but unpaid wages; the wildcard exemption is your only option. See, e.g. U.S. v. Christensen, 200 B.R. 869 (D.S.D. 1996) (applying FDCPA law, based on similar statutory structure to bankruptcy's opt-out law)

Federal Exemptions

Arkansas Exemptions

  • Earned but unpaid wages due for 60 days; in no event less than $25 per week
    Ark. Code Ann. 16-66-208
    Ark. Code Ann. 16-66-218 (b)(6)

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Arkansas Homestead | Insurance | Pensions | Personal Property | Public Benefits | Tools of Trade | Wage Garnishment | Wild Card |


Arkansas Wild Card Exemption

Most, but not all, states allow a so-called "wild-card" exemption that can apply to any property. The wild card exemption can be of particular help if one or more of your other exemptions falls short of protecting your equity. You may split your wild card exemption amount over multiple items and stack it atop other exemptions as needed to protect exposed equity.

Special notes about Arkansas Wild Card Exemption: In re Holt, 894 F.2d 1005 (8th Cir 1990) held that Arkansas residents are limited to exemptions in the Arkansas Constitution. Statutory exemptions can still be used in Arkansas for non bankruptcy purposes, but they cannot be claimed in bankruptcy. Constitution limits personal property exemptions to $200 in aggregate. See also, In re Kelley, 455 B.R. 710, Bkrtcy.E.D.Ark.,2011. This does not affect debtors using the Federal exemptions.

Federal Exemptions

Arkansas Exemptions

  • $500 of any personal property if married or head of family; $200 if not married
    Ark. Const. Art. 9, 1(200 for indiv)
    Ark. Const. Art. 9, 2(500 for married)
    Ark. Code Ann. 16-66-218 (b)(1),(2)

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