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My sister lives in Crawford County Arkansas. She purchased a house and land about 10 years ago for $40,000.00, it is paid off. She got ovarian cancer over a year ago and had surgery, also has lymes disease and can barely walk more than ten feet without having to sit down, she has a walker. She is 55 yrs old, unable to hold down a job. She was down here in Dallas visiting me last month and had to be taken to the hospital because she couldnt breath, ended up staying two days because of pnemonia. She has no insurance. She filed for state aid in AR a little over a year ago and was denied, she plans on refiling within the week. She lives very frugally and has no outstanding Credit Card Debt. She told me she had her land re-evaluated last year, it is worth more than $60,000.00. She today went to see a bankruptcy lawyer in Ft. Smith, and he advised her not to file bankruptcy because she owned her land and her truck outright. He told her just to ignore all the bill collector. Her medical bills are right about $50.000 now. Her house and her land is all she has, she cannot work. He advised her either to ignore the calls or sell her property. Is there not anything that can be done? Thank you, Tammie
Optional Information: State/Country relating to question: Arkansas Already Tried: Talking with an atty in Ft. Smith
Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarification.
Experience: 10 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
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Her attorney was correct, in AR, only $2500 of a persons hoem is protected, even if she used the Federal exemptions only $21,625 can be protected.
Her best option may be to consider taking her name of all her properties, and accounts, and putting the property into a trust or a family members name so creditors cannot come after any of her property.
Homestead:
522(d)(1), (5) - Real property, including mobile homes and co-ops, or burial plots up to $21,625. Unused portion of homestead, up to $10,825, may be used for other property.
Personal Property:
522(d)(2) - Motor vehicle up to $3,450.
I'm sorry, but as an Arkansas Bankruptcy Attorney, I have to step in here. the previous expert is incorrect. In Arkansas, a Debtor can use either the Arkansas or Federal exemptions. Traditionally, the Arkansas exemptions were limited to those in the Arkansas Constitution, which provide for an unlimited homestead exemption of up to 80 acres in a rural area or 1/4 acre in an urban area. Even if your sister's homestead exceeds 1/4 acre and would be deemed "urban" which is unclear from your question, she can elect to choose the 1/4 acre where the house is, and then her remaining land might be unexempt. If it's less than 80 acres and it's deemed "rural", however, it's all exempt. Furthermore, the statutory exemptions, used to be considered unconstitutional under the Arkansas Constitution, but the Arkansas Supreme Court came out with an opinion a few days ago which changed that. And so now your sister would have both the Constitution and statutory exemptions. It's possible that your sister MIGHT lose some assets in a Chapter 7, but not likely her home. Even in that event, she might file a Chapter 13. If you have any further questions or need clarification, please feel free to ask.John A. Flynn, Esq.41081.6939628819
To clarify, the $2500 value the previous expert cites, only applies to the land in excess of the 1/4 acre urban or 80 acres rural. Under those acreages, it is "without regard to value."
Experience: 12 Years Experience in Bankruptcy - Mid-South Super Lawyer
Let me clarify, I was mistaken in terms of the AR homestead exemption, There is unlimited homestead within certain acreage limits, so in AR she could file bankruptcy and save her home, she would not need to use the Federal exemptions.