When a Chapter 13 payment plan bogs down due to reduced income or other financial setbacks, the debtors may find it necessary to convert to a Chapter 7 and discontinue the Chapter 13. The debtor in a Chapter 13 proceeding in Arkansas or any other jurisdiction has a right to make that conversion at any time. One problem that may arise, however, is regarding the debtor's monthly payments still held by the Chapter 13 trustee and not distributed to creditors at the time of conversion to Chapter 7. As a general rule, the trustee usually refunds that balance to the debtors after deducting fair sums for administrative expenses.
Sometimes pride can be a great detriment to one's right to financial peace of mind. Pride can prevent a retired person from filing bankruptcy when the need arises. There are many reasons why a retired person residing in Arkansas or another state will have a legitimate need to file for federal debt relief. When that need occurs, the failure to file bankruptcy can sometimes mean the failure to protect one's retirement assets from creditors.
In Arkansas criminal prosecutions, there are often cases where the defendant admits to the alleged behavior but the case turns on whether there was a defense to it or whether the defendant acted with criminal intent to commit the crime. Additionally, some criminal cases may turn on whether the defendant is actually guilty of a lesser crime than the one charged, such as when there is an issue over the different degrees of murder. Perhaps not quite as common is the case where the defendant denies being involved at all in any of the activity charged.
The trouble with much of the conventional wisdom about debt overload is that it often asks for virtually superhuman financial sacrifice by, in one way or another, paying off essentially all of the debt that is owed. Programs such as consolidation plans, paying one debt at a time, or even negotiated "reduced" settlements with each creditor are all treacherous and exhausting pathways that often fail or provide no long-term benefit to the debtor. When one does the math and makes relevant comparisons, no remedy works better in Arkansas or nationwide than a Chapter 7 bankruptcy.
Federal litigation against major banks may give a victory to consumers nationwide, including in Arkansas. Many persons who received a discharge in bankruptcy found in recent years that the banks were continuing to report bills, such as credit card balances, as still due and owing. Federal law requires banks to erase, without negative comment, accounts discharged in bankruptcy from the debtor's credit bureau records.
In all bankruptcy districts, including in Arkansas, the debtor is given statutory exemptions to retain certain property in a bankruptcy. The Chapter 7 trustee has the obligation to sell the debtor's property that is not exempt, and to distribute the proceeds to the creditors. In most consumer bankruptcies, however, the exemptions are sufficient to allow debtors to retain their basic furnishings, belongings and other specified property.
Most Americans, including Arkansas residents, strive to obtain a good credit record and score. It can be particularly important in buying a house or even a car, and for obtaining other kinds of personal credit. However, sometimes financial crises unavoidably occur, and options such as bankruptcy must be chosen to support the family's survival.
Even with medical insurance, many Americans nevertheless still struggle with medical bills. Medical debt sours the credit record and lowers the score, both in Arkansas and nationwide. Most people live on a very tight budget that cannot handle a substantial extra bill that was not budgeted.