Eligibility Requirements for Chapter 13 Bankruptcy in Arkansas

Although Chapter 13 bankruptcy offers significant protections for struggling individuals, the resulting reorganization may not be worth the time, effort, and money involved. It’s important to understand what happens through the filing to ensure it’s right for you and your specific financial situation.

If you don’t qualify for Chapter 7 bankruptcy, you’ll need to attempt to qualify for Chapter 13 to attain debt relief. Chapter 13 bankruptcy is known as a “reorganization bankruptcy” as your debt gets reorganized into a payment plan you can ideally sustain.

It’s a better choice for high earners who do not qualify for Chapter 7 bankruptcy because of their assets and their income. Chapter 13 may also help prevent foreclosure or repossession across the length of the repayment plan.

The minimum repayment amount depends largely on how much you earn, how much you owe to your debtors and the value of any nonexempt property in your possession. Any unsecured debt that is remaining after you finish your repayment plan is automatically discharged.

Key Qualification Points for Chapter 13 Bankruptcy in Arkansas

  • Demonstrate adequate income to meet the terms of a court-ordered payment plan
  • Show that your total secured and unsecured debt falls within limits set by bankruptcy law
  • Proof of filed state and federal income taxes for the past four years
  • Your unsecured debts (credit cards, personal loans, etc.) do not exceed $394,725
  • Your secured debts (mortgages, car loans, etc.) do not exceed $1,184,200

Time Limits for Chapter 13 Bankruptcy in Arkansas

Those who have previously discharged their debts through Chapter 13 bankruptcy cannot file for another Chapter 13 bankruptcy for at least two years. Filers must also wait six years before they’re eligible to file for Chapter 7 bankruptcy. Those who paid back at least 70% of their unsecured debt in good faith may be eligible to file earlier. It goes without saying that hiding assets may constitute bankruptcy fraud through this process. The courts may prevent the filer from attaining another bankruptcy for an even longer time.


Chapter 13 is a serious filing, and a number of questions arise. Am I eligible to file? What are the limits? How do I know I’ll qualify? These are all questions that need to be taken into consideration and ones that a qualified bankruptcy law firm can help answer. Natural State Law is a trusted source for Arkansas individuals working through bankruptcy and is ready to help you navigate the process. Call us today at (501) 916-2878 to learn more and schedule a free consultation.