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Chapter 7 vs Chapter 13 Bankruptcy: What Kind of Bankruptcy Should You File?

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When deciding between filing for Chapter 7 vs Chapter 13 Bankruptcy in Arkansas, there are a number of essential considerations to keep in mind. If you have unsecured debt, for example, a Chapter 7 filing is preferable, but a Chapter 13 filing is the better choice if you need to prevent a home foreclosure. Seeking legal advice, especially from an experienced Bankruptcy attorney in Arkansas, will help you determine a sound strategy for the specifics of your Bankruptcy case. 


In most instances, Arkansas consumers choose to file for Chapter 7 Bankruptcy. This is the case for a number of reasons.

First, unsecured debt is easier to eliminate through a Chapter 7 filing. Second, consumers in need of rapid relief from creditors will want to file for Chapter 7 if they are eligible. This is because an Arkansas Bankruptcy court can issue a discharge order with greater expedience in a Chapter 7 filing, which absolves you from personal liability for the discharged debt.

Examples of dischargeable debt include the following:

  • Credit card debt
  • Personal loans
  • Medical bills and expenses
  • Business debts
  • Utility bills

While an attorney can help you determine the scope of your debt that is dischargeable, it is important to note that only debts incurred prior to the Bankruptcy filing are dischargeable. In effect, debts incurred after filing for Bankruptcy in Arkansas may not be discharged.

Finally, a Chapter 7 filing is appropriate in instances where a consumer cannot afford a creditor repayment plan of three to five years as outlined under a Chapter 13 plan.

In short, when possible, it makes sense to file for Chapter 7 Bankruptcy in most cases, but there are times when a Chapter 13 filing is more ideal for some.


One of the most common reasons why consumers file a Chapter 13 Bankruptcy is to protect assets. Chapter 13 bankruptcies can prevent home foreclosures and the repossession of your vehicles.

Additionally, some debt is not dischargeable in Chapter 7, and a Chapter 13 filing can allow these debts to be paid overtime. This beneficial repayment aspect of Chapter 13 can be applied to debts such as student loans and various tax debts that survive Chapter 7 and 13 bankruptcies.

When comparing Chapter 7 vs Chapter 13, some debts that are not eligible for discharge under Chapter 7 can be discharged under Chapter 13 Bankruptcy. Examples include the following:

  • Homeowner, condo, or cooperative fees
  • Court expenses
  • Marital debts
  • Debts incurred from paying non-dischargeable taxes


To file for Chapter 7 Bankruptcy, Arkansas requires that your average monthly income six months prior to the Bankruptcy filing be equal to or less than the median income in the state of Arkansas. If your income exceeds the median income in Arkansas, you will not qualify for Chapter 7 and must file for Chapter 13 instead. In effect, filing for Bankruptcy is not as simple as choosing the type you like most since legal requirements often dictate the options available to you.

To navigate Bankruptcy successfully, you need a Bankruptcy attorney in Arkansas with a proven record who can help you along each step of the way. Contact Caddell Reynolds for legal consultation regarding your Bankruptcy filing at (800) 889-6944.