The Arkansas Homestead Exemption Applies Differently Based On Whether You Reside In an Urban Area or Out In the Country.

Does Arkansas bankruptcy law discrminate against the state’s city dwellers? Well, not exactly. Those filing for bankruptcy in Arkansas can choose between state or federal exemptions. However, choosing between the two may be a function of whether you live in an urban area, such as Fayettville, or out in the country. Furthermore, the acreage of your real estate will play a factor in calculating your available homestead exemption in Arkansas. Homestead exemptions are important because they determine the amount of home equity an Arkansas resident can shield from their creditors.

Arkansas “City Slicker” Homestead Exemption

The Fayettville homeowner (or resident of another Arkansas city) can file for bankruptcy and protect an unlimited value in his or her home IF the land is 1/4 acre or smaller. If the property is between 1/4 acre and 1 acre, the exemption is limited to $2,500.

Arkansas Rural Homestead Exemption

Arkansas law allows for an unlimited exemption for rural homes up to 80 acres. If the homestead is between 81-160 actres, the exemption is limited to $2,500.

Need more information on how homestead exemptions work? See: What Is a Homestead Exemption? If you are considering filing for bankruptcy in Arkansas and are concerned how your home may be affected, talk to an attorney.