The decision to file for bankruptcy often comes with mixed emotions. You may feel uncertainty and concern about the future. After all, it’s a significant step with profound implications for your life in Jonesboro, AR. 

Having a bankruptcy attorney by your side can demystify the process and protect your interests. They can help you understand your rights, weigh your options, and make a well-organized decision. Explore how partnering with legal help can transform this process into a step toward financial freedom!

Types of Bankruptcy in Jonesboro, Arkansas

Bankruptcy is a legal process that helps individuals and businesses get a fresh financial start. It eliminates a portion of or all of their debts or financial liabilities. In Jonesboro, AR to be approved, individuals must prove they have a hardship that prevents them from staying current on their financial obligations. Keep in mind that not all debts qualify. Some liabilities, such as child support arrears, delinquent taxes, alimony, and student loans generally do not qualify for discharge. Consumers who find themselves falling behind in debt can file either Chapter 7, 11 or 13. To determine which option is right for you, you’ll need to assess your goals, assets, and income. You should also consider working with an experienced bankruptcy attorney.

The U.S. Bankruptcy Court for the Eastern District of Arkansas hears local bankruptcy cases. This federal court handles these proceedings in Jonesboro.

Chapter 7 Bankruptcy

Many people find Chapter 7 to be the right solution for their circumstances because it provides them with the opportunity to start over financially. However, before filing for Chapter 7 bankruptcy, you should thoroughly assess your income and ability to repay what you owe. You should also speak with a bankruptcy attorney in Jonesboro  who can help you to decide if a liquidation plan is right for you.

Typically, individuals approved for Chapter 7 lack stable income or have experienced a change in circumstances that has resulted in an inability to manage their debts. Though Chapter 7 erases debts, the tradeoff is you may have to give up certain possessions, such as your home, car or some other assets. However, once you file your petition, an automatic stay goes into effect that requires all collection activity against you like foreclosures and garnishments, to stop temporarily. However, the automatic stay does not prevent all collection attempts. For example, if you owe child support or restitution for a criminal case, you are still liable for those payments.

Recognizing what has an automatic stay in Jonesboro is essential. It may change how you view the benefits of filing for Chapter 7. The scope and limitations can even extend to specific tax obligations you cannot avoid.

Chapter 11 Bankruptcy

Chapter 11 bankruptcy is more complex than other types of bankruptcy. It is often used by businesses and certain types of people. It allows petitioners to restructure their debts with a reorganization plan, so they are easier to manage over a determined length of time, usually four to 18 months. The main benefit of Chapter 11 bankruptcy is that it does not require petitioners to sell off or liquidate their assets to pay what they owe. It does allow debtors to negotiate with their creditors a reorganization plan that enables them to stay current on their debts moving forward.

Filing for Chapter 11 in Jonesboro starts with a petition and documentation. The courts need a schedule of your assets and liabilities, income and expenses, and other affairs. Moreover, you should supply your most recent tax return and complete a credit counseling course.

Chapter 13 Bankruptcy

Chapter 13 Bankruptcy is a debt restructuring or wage earners plan. In Jonesboro, AR after you file, the courts will assign a trustee to examine your liabilities and assets and ability to pay bills. Unlike other types of bankruptcy, Chapter 13 involves you restructuring your debt with a three to five-year repayment plan. The flexibility of this repayment plan will depend on what property you want to keep and how steady your income is. It may also give you the opportunity to have some or most of your debts discharged.

Filing for Chapter 13 in Jonesboro begins with the usual paperwork. You must provide details about your financial solvency. However, much of the time will go toward the repayment plan. Generally, you or your attorney have two weeks to offer a compelling case.

The Bankruptcy Process in Jonesboro, Arkansas

There is never an ideal time to declare bankruptcy. However, if you are unable to pay off what you owe within five years, filing for bankruptcy can help you to lessen the negative impact on your situation and help you get back on track.

In Jonesboro to begin the filing process, gather all of your financial records, including monthly expenses, debts, assets and annual income. This information is crucial to give the courts an accurate picture of your circumstances. Failure to provide all necessary information can result in your petition being denied.

Arkansas provides two sets of exemptions for bankruptcy filers from Jonesboro. Notable exemptions include the homestead exemption, allowing unlimited equity in a primary residence. There are also property exemptions that cover items like clothing, household goods, and motor vehicles.

At least six months before you file for bankruptcy, eliminate unnecessary spending. Do not run up the balances on your credit accounts. You’ll also need to complete an approved credit counseling course, usually online or over the phone. Credit counseling is necessary to help you learn financial literacy and help you learn better financial habits. Once you complete the course, you’ll receive a certificate of completion to include in your filing. If you don’t have the certificate of completion from the credit counseling course that you took, the courts will reject your bankruptcy petition.

Work With an Experienced Jonesboro, Arkansas Lawyer

Hiring a local bankruptcy lawyer in Jonesboro during this process can help reduce the costly risks of self-representation in court. An experienced bankruptcy lawyer understands state and federal bankruptcy laws. He or she can help you understand which laws apply to your case, especially which debts that can be discharged or can’t be discharged. An experienced Arkansas attorney can also offer you guidance to improve the outcome of your case.

Keep in mind that there are debt management alternatives and financial resources that may benefit you more than bankruptcy, such as debt consolidation. Though bankruptcy is an attractive solution, it is best as a last resort. Do you need immediate help? Then one of our experienced lawyers in Jonesboro can guide you through the entire bankruptcy process. We can even help you connect with an attorney across Arkansas state lines.

Submit a request online or call us today at (866) 345-6784 to get in touch with an experienced lawyer in your area!