Bankruptcy Attorney in Fayetteville and Fort Smith, Arkansas

While the thought of declaring bankruptcy can be intimidating, it’s important to recognize that it can also be a strategic decision that paves the way for financial stability and recovery. Bankruptcy can provide much-needed relief for those struggling with unmanageable debt, offering a chance to start over or restructure financial obligations. 

At the Bond Law Office, our bankruptcy attorney is committed to guiding individuals and businesses through the decision of whether they should declare bankruptcy.  

Located in Fayetteville and Fort Smith, Arkansas, Bond Law Office serves clients throughout The Arkansas River Valley and the cities of Harrison, Eureka Springs, Clarksville, Waldron, and Mena, Arkansas. Contact our lawyer today to find out how we can support you in finding your best path forward.  

What Is Bankruptcy? When Should You Consider It?

Bankruptcy is a legal process designed to aid individuals and businesses who can no longer repay their debts or meet their financial obligations. It provides a structured framework for reducing or eliminating debts and can be a valuable tool for managing financial difficulties.  

Declaring bankruptcy is a serious decision that should not be taken lightly. It is important to carefully consider your options and seek legal advice before making any decisions. Some signs that you may benefit from filing for bankruptcy include: 

• Being unable to pay your bills or debts on time. 

• Constantly receiving collection calls and notices. 

• Facing a lawsuit or wage garnishment due to unpaid debt. 

• Using credit cards to cover basic expenses like rent or groceries. 

If you're experiencing any of these situations, consult with a bankruptcy attorney to explore your options. 

Types of Bankruptcy

Understanding the different types of bankruptcy lets you determine the best course of action for your financial situation. The most common forms of bankruptcy for individuals and businesses are Chapter 7, Chapter 11, and Chapter 13. Each type serves distinct purposes and offers various benefits. 

Chapter 7 Bankruptcy

Often referred to as "liquidation bankruptcy," Chapter 7 is designed for individuals and businesses with limited income who cannot repay their debts. In this process, a trustee is appointed to liquidate non-exempt assets, and the proceeds are used to pay off creditors.  

Chapter 7 allows for the discharge of most unsecured debts, such as credit card balances, medical bills, and personal loans, providing a fresh start for the debtor. However, not all assets may be subject to liquidation, and certain types of debts, like student loans and child support, typically cannot be discharged. 

Some pros of Chapter 7 bankruptcy include its quick process (typically 3-6 months), the discharge of most unsecured debts, and protection from debtors. On the other hand, some cons include the loss of non-exempt assets and a negative impact on your credit score.  

To qualify for Chapter 7 bankruptcy, individuals must pass a means test, which compares their income to the median income in Arkansas. If your income is below the median, you may be eligible to file for Chapter 7. 

Chapter 9 Bankruptcy

Chapter 9 is a specific type of bankruptcy reserved for municipalities, such as cities or counties. This form of bankruptcy allows these entities to reorganize their debts and continue providing essential services to their communities.

The process for Chapter 9 bankruptcy involves creating a debt restructuring plan, which must be approved by creditors and the court. Once approved, the municipality will make payments according to the plan over a period of time, typically lasting several years.

Some pros of Chapter 9 bankruptcy include allowing municipalities to continue operating while restructuring their debts and providing a fair resolution for both the municipality and its creditors. However, some cons may include a decrease in services offered by the municipality during the restructuring process and potential tax increases for residents.

Chapter 11 Bankruptcy

Chapter 11 is primarily used by businesses seeking to restructure their debts while continuing their operations. This type of bankruptcy allows companies to reorganize their finances under the supervision of the court. The business can negotiate new terms with creditors, reduce its debt load, and develop a plan to return to profitability.  

Chapter 11 can also be an option for individuals with substantial debts and assets who want to develop a repayment plan while retaining their property. However, it is often more difficult and costly than other types of bankruptcy. 

Some pros for Chapter 11 bankruptcy include allowing the business to continue operating, the potential to reduce or discharge debts, and flexibility in restructuring. Some cons include it being a complicated process, it's expensive, and it requires detailed financial disclosures.

Chapter 12 Bankruptcy

This type of bankruptcy is specifically designed for family farmers and fishermen. It allows them to restructure their debts and develop a plan to repay over time while keeping their assets. It offers many of the same benefits as Chapter 11, such as allowing the business to continue operating and reducing or discharging debts.

Chapter 12 bankruptcy has specific eligibility requirements, including having a certain amount of debt related to farming or fishing operations and meeting income limitations. It also requires financial disclosures and court supervision.

Overall, Chapter 11 and Chapter 12 bankruptcies are options for businesses and individuals with substantial debts who want to restructure their finances while retaining ownership of their assets. However, they can be complex processes that require careful consideration and expert legal guidance. If you

Chapter 13 Bankruptcy

Known as "reorganization bankruptcy," Chapter 13 bankruptcy is suited for individuals with regular income who wish to repay their debts without liquidating their assets. Under Chapter 13, debtors propose a repayment plan, typically lasting three to five years, through which they make monthly payments to a trustee.  

The trustee then distributes the payments to creditors. This type of bankruptcy lets individuals keep their homes, cars, and other significant assets while catching up on overdue payments. It also allows for the potential discharge of certain unsecured debts at the end of the repayment period. 

Individuals with regular income and unsecured debts under $419,275 and secured debts under $1,257,850 are eligible for Chapter 13. Pros for this type of bankruptcy include the ability to retain assets, create a manageable repayment plan, and discharge some debts. Some cons include being a long-term commitment and having a negative impact on credit score.  

Understanding these types of bankruptcy lets you better assess which option aligns with your financial situation and goals. 

Why Bankruptcy Might Benefit You

Considering individual or business bankruptcy may feel daunting, but it can also be a pragmatic step towards financial recovery and peace of mind. Here are several reasons why someone might consider bankruptcy: 

• Immediate relief from debt: One of the primary benefits of filing for bankruptcy is the immediate relief it can provide from overwhelming debt. Upon filing, an automatic stay is typically initiated, which halts most collection activities, including foreclosures, repossessions, wage garnishments, and lawsuits. 

• A fresh financial start: Bankruptcy lets individuals and businesses either discharge their debts or reorganize them into manageable repayment plans. This financial reset can offer a fresh start, free from the financial burden of insurmountable debt. 

• Protection of assets: Certain types of bankruptcy allow debtors to keep significant assets such as homes and cars, provided they continue to make agreed-upon payments. This can be crucial for those looking to retain important personal and business assets while restructuring their debts. 

• Mental and emotional relief: The stress and anxiety associated with unmanageable debt can take a toll on one's mental and emotional well-being. Filing for bankruptcy can alleviate this pressure, offering a path toward a more stable financial future and improving overall mental health. 

• Structured debt repayment: For those who opt for bankruptcy plans that involve debt repayment, the process offers a structured way to address debt. This structured approach can assist debtors in managing their finances better and adhering to a clear roadmap to financial recovery. 

We recommend consulting with a bankruptcy attorney if you are struggling with debt and find yourself in any of these situations. An experienced bankruptcy attorney can show you your options and guide you in making an informed decision that best suits your financial circumstances. 

How to Apply for Bankruptcy

Applying for bankruptcy is a multifaceted process requiring careful consideration and adherence to legal procedures. Here is a step-by-step guide on how to apply for bankruptcy: 

1. Evaluation of financial situation: Before filing for bankruptcy, evaluate your financial situation comprehensively. Gather all relevant financial documents, including income statements, bank statements, credit card bills, loan documents, and any other debts. This will show you and your attorney the extent of your financial challenges. 

2. Consultation with a bankruptcy attorney: An attorney provides invaluable advice on whether bankruptcy is the right course of action for you, which type of bankruptcy to file, and what to expect throughout the process. At Bond Law Office, we offer personalized consultations to assist you in making these decisions. 

3. Credit counseling: Before you can file for bankruptcy, you are required to complete credit counseling with an approved agency. This counseling session, typically lasting about 60 to 90 minutes, is designed to help you understand your financial options and create a budget. You must obtain a certificate of completion, which will be submitted as part of your bankruptcy documentation. 

4. Filing the bankruptcy petition: Prepare and file a bankruptcy petition with the court. The petition includes detailed information about your finances, such as your income, expenses, assets, and debts. Your attorney will help you complete and file these forms accurately for compliance with legal requirements. Once filed, an automatic stay goes into effect, providing temporary relief from most collection actions. 

5. Appointment of a trustee: After filing your petition, the court will appoint a bankruptcy trustee to oversee your case. The trustee's role is to review your petition, administer your bankruptcy estate, and oversee that creditors receive as much payment as possible in accordance with bankruptcy laws. 

6. Meeting of creditors (341 Meeting): You will be required to attend a meeting of creditors, known as the 341 meeting. During this meeting, you will answer questions under oath about your financial situation and the information provided in your bankruptcy petition. 

7. Completion of debtor education course: After the 341 meeting, you must complete a debtor education course before receiving a discharge of your debts. This course educates you on financial management and helps you make a plan to avoid future financial difficulties. A certificate of completion must be filed with the court. 

8. Discharge of debts: If you have followed all the necessary steps and the court finds no issues, you will receive a discharge of your debts. This means that you are no longer legally obligated to repay the discharged debts, offering you a financial fresh start. The timeline for discharge varies depending on the type of bankruptcy filed. 

By following these steps and working closely with a qualified bankruptcy attorney, you can achieve the financial relief you need. 

Contact Bond Law Office to Begin Your Journey Toward Financial Relief

Do not delay in taking control of your financial situation and exploring your options for potential bankruptcy benefits. At the Bond Law Office, our experienced team is dedicated to assisting you with bankruptcy. We understand the challenges you face and are committed to providing personalized and effective solutions.  

By understanding and leveraging the strategies we discuss, you can achieve financial stability and regain control of your future. Let us support your journey to overcome your financial obstacles with confidence and precision.  

Contact us today to schedule a consultation with our experienced bankruptcy attorney and discuss how we can partner in achieving your financial relief.