The Arkansas Answer in One Paragraph
Arkansas filers choose between Chapter 7 (liquidation, 3-4 months, strong discharge rate) and Chapter 13 (3-5 year repayment plan, better for saving a home from foreclosure or for filers above the means test). Three Arkansas-specific inputs drive the choice: (1) the Arkansas means test median of $54,714 for a 1-person household, (2) the Arkansas homestead exemption of Unlimited (urban 1/4 acre, rural 80 acres), and (3) the local filing mix and outcome data below. Everything else on this page is elaboration on those three factors.
Quick Side-by-Side
Chapter 7 in Arkansas
Chapter 13 in Arkansas
Arkansas Means Test Thresholds (April 2026)
Arkansas's single-person median of $54,714 is below the national average. Most filers here clear Part 1 of the means test on income alone and qualify for Chapter 7 without running the full Part 2 expense deduction.
| Household Size | Arkansas Median Income |
|---|---|
| 1-person household | $54,700 |
| 2-person household | $71,100 |
| 3-person household | $83,200 |
| 4-person household | $96,800 |
| 5-person household | $105,100 |
| 6-person household | $113,300 |
For household sizes above 6, add $11,100 per additional member. Full details at the Arkansas means test calculator. For a general discussion, see our means test overview.
Arkansas Homestead Exemption and the Chapter Choice
Arkansas has an unlimited (or nearly unlimited) homestead exemption under Ark. Const. art. IX. That is a powerful Chapter 7 protection: you can keep a home with very substantial equity and still wipe out your unsecured debt. Federal BAPCPA restrictions (11 U.S.C. Section 522(p) -- $214,000 cap for property acquired within 1,215 days) can limit this in a narrow set of cases. Homeowners in Arkansas should almost always model Chapter 7 before considering Chapter 13.
Arkansas lets filers choose between state exemptions and the federal bankruptcy exemption scheme (11 U.S.C. Section 522(d)). Review the full exemption list at bankruptcyexemptionsbystate.com/arkansas before assuming any specific asset is safe.
Homestead amount (Arkansas): Unlimited (urban 1/4 acre, rural 80 acres). Statute: Ark. Const. art. IX.
Arkansas's Chapter 7 vs Chapter 13 Filing Mix
Arkansas's Ch. 7/13 mix is roughly balanced: 48.2% Chapter 7 vs 51.8% Chapter 13 across 959 cases. This is more Chapter 13-heavy than the national average. Ask your attorney to explain why your facts fit Chapter 13 better than Chapter 7 before committing to a 3-5 year plan.
Why does filing mix matter? Attorney fee structures often favor Chapter 13 (paid through the plan rather than up-front), which can produce local-market bias toward Chapter 13 that is not driven by individual debtor facts. FJC data lets you see whether Arkansas's mix matches the economics of the typical filer's situation.
Arkansas Federal Court Data
Numbers below come from the Federal Judicial Center Integrated Database, covering 959 consumer bankruptcy cases filed in Arkansas's federal bankruptcy courts.
| Chapter | Cases Filed | Discharge Rate (resolved) |
|---|---|---|
| Chapter 7 | 462 | 96.7% |
| Chapter 13 | 497 | 60.9% |
Outcomes in Arkansas differ sharply between the chapters. Of resolved Chapter 7 cases in the FJC database, 96.7% end in discharge. Of resolved Chapter 13 cases, only 60.9% end in discharge; the remaining 39.1% are dismissed before the plan completes. If you are physically able to file either chapter, this gap is a reason to think hard before committing to a 3-5 year Chapter 13 plan in Arkansas.
Which Chapter Fits Which Arkansas Filer?
- If your income is below the Arkansas median ($54,714, 1-person) and you own little non-exempt property: Chapter 7 is almost certainly the right choice. Fast, cheap, and the highest discharge rate in consumer bankruptcy.
- If you are behind on your mortgage or car loan and want to keep the collateral: Chapter 13 lets you cure arrears over 36 to 60 months while the automatic stay blocks foreclosure and repossession.
- If you have high home equity and Arkansas caps the homestead exemption: run the numbers on Chapter 13 cramdown, lien stripping (for wholly underwater junior liens), and the federal BAPCPA homestead cap before assuming Chapter 7 is safe.
- If you have filed before within the lookback windows: use the 1328(f) discharge screener first -- a prior Chapter 7 discharge bars another Chapter 7 for 8 years, and a prior Chapter 13 discharge bars another Chapter 13 for 2 years.
Rule of thumb for Arkansas: if you qualify for Chapter 7 on the means test AND your home equity is within the Unlimited (urban 1/4 acre, rural 80 acres) homestead, Chapter 7 is almost always the right choice. Chapter 13 is the right answer when specific facts (arrears, non-exempt equity, prior Chapter 7 within 8 years) rule Chapter 7 out.
Frequently Asked Questions
Is Chapter 7 or Chapter 13 better in Arkansas?
For most Arkansas filers who pass the means test, Chapter 7 is faster, cheaper, and succeeds more often. Chapter 13 is the right choice if you need to save a home from foreclosure, cure arrears, catch up on priority taxes, or cannot qualify for Chapter 7.
What is the Chapter 7 income limit in Arkansas?
There is no hard dollar limit. The means test compares your 6-month average income (annualized) to the Arkansas median for your household size. One person: $54,714. Four person: $96,800. Above-median filers can still qualify by running Part 2 expense deductions.
Can I use federal bankruptcy exemptions in Arkansas?
Yes. Arkansas is an opt-in state -- filers may choose federal exemptions under 11 U.S.C. Section 522(d) instead of state exemptions. Compare both schedules before filing; federal can offer a larger wildcard while state may offer a larger homestead.
How much home equity is protected in Arkansas bankruptcy?
Arkansas's homestead exemption protects Unlimited (urban 1/4 acre, rural 80 acres) under Ark. Const. art. IX. Federal BAPCPA limits (11 U.S.C. Section 522(p)) can cap this at approximately $214,000 for a residence acquired within 1,215 days of filing.
How long does bankruptcy take in Arkansas?
Chapter 7 takes 3 to 4 months from filing to discharge in Arkansas federal bankruptcy court. Chapter 13 takes 3 years (below-median) or 5 years (above-median) of monthly plan payments before discharge.
Can I switch from Chapter 13 to Chapter 7 in Arkansas?
Yes. Under 11 U.S.C. Section 1307(a), a Chapter 13 debtor in Arkansas generally has the right to convert to Chapter 7 at any time, as long as the case was not previously converted from Chapter 7. You must still pass the means test at the time of conversion.
Related Arkansas Resources
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Last updated: 2026-04-18. Not legal advice. Statutory homestead and median-income figures are reproduced from public sources and may lag statutory amendments -- verify against current state statute before relying.
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