Chapter 7 (click for more information)Chapter 7 is the chapter most frequently chosen by individuals. It can offer a relatively speedy and inexpensive fresh financial start. A Chapter 7 filed in Arkansas provides a generous set of “exemptions” which means that most people are allowed to keep all of their property. Chapter 7 is designed for persons in financial difficulty who do not have the ability to pay their existing debts. If your debts are primarily consumer debts, then you are subject to a “means test” designed to determine whether your case can proceed under chapter 7. If your income is greater than the median income for your state of residence and family size, then you may have to file a Chapter 13. Chapter 13 (click for more information)Under chapter 13, you must file with the court a plan to repay your creditors all or part of the money that you owe them, using your future earnings. The period allowed by the court to repay your debts may be three years or five years, depending upon your income and other factors. The court must approve your plan before it can take effect. After completing the payments under your plan, your debts are generally discharged except for domestic support obligations; most student loans; certain taxes; most criminal fines and restitution obligations; certain debts which are not properly listed in your bankruptcy papers; certain debts for acts that caused death or personal injury; and certain long term secured obligations.