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Exemptions - Will I Lose Property?
State and federal laws provide what are called "exemptions." What this means is that a debtor is entitled to keep certain property in various categories up to a particular dollar value. Assets in excess of the exemption levels are considered "non-exempt assets," and they are generally given to the trustee for sale. The debtor has the option of paying the trustee the amount of money he would have received had property been taken by the trustee and sold. In Arkansas, a debtor can choose between State or Federal exemptions. The Federal are the most liberal, with certain exceptions. For example, the Federal Exemption for residential real property in is $15,000.00 for each debtor in equity (value less mortgages)or $30,000.00 for a married couple. If a couple has a home worth $100,000 with a mortgage of $70,000, they would not lose the home because the equity would be $30,000.00, exactly the amount of the exemption. On the other hand, if a couple had a home worth $200,000 and a mortgage of $67,000, the amount of equity ($133,000) would exceed the exemption level. In such a case, the trustee would have the home sold, pay off the mortgage, give the debtors their $33,000 exemption and use the remaining funds to pay down the claims of unsecured creditors. However, under Arkansas law, a debtor's homestead is nearly always totally exempt, without regard to value. During your initial inverview, we will determine which exemption scheme you should take; we will go through a checklist of questions to see if there is any realistic possibility of losing any property to the trustee. 
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