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How to Get Debt Relief in Arkansas

Sarah Edwards | October 19, 2022

Sarah Edwards
Legal Expert
Sarah Edwards, BS

Sarah Edwards is a professional researcher and writer specializing in legal content. An Emerson College alumna, she holds a Bachelor of Science in Communication from the prestigious Boston institution.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Find the debt relief you need.

Summary: If you're struggling with debt in Arkansas, SoloSuit can help you find the relief you need.

If you're struggling with debt in Arkansas, you're not alone. A recent study conducted by WalletHub shows that the average household in Little Rock, Arkansas, carries $10,527 in credit card debt. The state also has one of the lowest average salaries in the nation, with the average worker earning $46,500 annually.. These amounts, combined with the surge in inflation and housing costs over the past year, can make it hard for the average Arkansas resident to get ahead on their debt.

However, whether you're just getting by through minimum payments or being actively chased by debt collectors, certain laws exist to help protect consumers who owe debt. These laws have been enacted by both the federal and state government.

What federal rights do I have regarding debt in Arkansas?

The federal government first passed the Fair Debt Collection Practices Act (FDCPA) back in 1977. This act gave exclusive protections to consumers who have overdue accounts with lenders or debt collectors. There are a number of provisions that are given in this act. First, upon new collection activity from a debt collector, you are entitled to request validation of the debt in writing within 30 days of receipt of your letter. You can officially request a debt validation by sending a Debt Validation Letter.

If you request the validation, your debt collector must provide you with specific information pertaining to the debt. This includes:

  • The amount of the debt
  • The name and address of the original creditor
  • Verification of the debt, such as a statement from the original creditor
  • Validation that the debt belongs to the individual

The validation process can clear up any misunderstandings between the consumer and the debt collection agency. For example, if the debt was held by someone else, the debt collection notice would be an error, and the debt collection agency would not be able to validate it.

In some cases, people may also be the victim of identity theft. It's not uncommon for people to have their personal information stolen through a multitude of avenues, including hacking, stolen documents, or other means. In these cases, someone may apply for a loan from a lender under the individual's name and identification information, with no intention of ever paying it back.

The debt collection notice may trigger the first inkling someone has that their identity may have been compromised. Cases of identity theft will need to be reported to both the police and the credit bureaus. Unfortunately, it may take time to clean up your credit report if identity theft has occurred.

Finally, the FDCPA protects individuals from abusive actions taken by debt collectors. The definition of abusive is quite broad, and there are a number of debt collection activities that are prohibited by the act. A few violations of the FDCPA include:

  • Calling a person repeatedly throughout the day or letting the phone ring non-stop
  • Using profanity or vulgar language when speaking to a consumer about their debt
  • Threatening the consumer with legal action, if they don't actually intend to follow through
  • Pretending to be someone else when attempting to collect the debt
  • Telling the consumer they owe an amount that is different from the actual total due
  • Calling before 8am or after 9pm
  • Contacting you at your workplace when your employer prohibits such communications
  • Discussing your debt with your family members, friends, or corworkers

While these are just a handful of wrongful practices that may be conducted by debt collectors, there are numerous others. If you feel that you are being illegally harassed by a debt collector, you can file a complaint against them with the Consumer Financial Protection Bureau or the Better Business Bureau.

What state laws are in place to protect me from debt collectors in Arkansas?

In addition to adopting the FDCPA, Arkansas has placed statutes of limitations for various types of consumer debt. A statute of limitations actively limits the amount of time that debt collectors have to pursue you for an overdue debt. If you find that a collection agency is sending you letters for debt that was incurred years in the past, collection for the debt may be time-barred by state law.

However, even though the debt may be time-barred, you will still owe it. The collection agency can continue to call you and send you letters. It will appear as outstanding on your credit report. If you respond to any of the letters, the statute of limitations will be reset, allowing the agency to pursue you again in court.

Statute of limitations laws that are in place for Arkansas include the following:


Arkansas Statute of Limitations on Debt

Type of debt

Statute of limitations

Mortgage

5 years

Medical

2 years

Credit card

5 years

Auto loan

4 years

State tax

10 years


Source: FindLaw

Once a time limit has passed for a specific type of debt, you can no longer be sued for repayment unless you reset the statute of limitations by acknowledging that you owe it or making a payment towards it.

What types of debt relief can I obtain in Arkansas?

There are three main types of debt relief programs available for debtors who want to eliminate their debt and obtain a fresh start. These include debt consolidation, debt settlement, and bankruptcy. Now, let's break down each of these methods a little further.

Debt consolidation in Arkansas

Under debt consolidation, you obtain a loan to pay all of your creditors in one shot. To do this, you will need to obtain a loan from a debt consolidation company. Oftentimes, you must have a decent credit score in order to do so. Using debt consolidation can allow you to save money by reducing the amount you spend on interest and giving you the opportunity to make one regular payment to your debt consolidation lender.

Debt settlement in Arkansas

If you choose to eliminate your debts through debt settlement, you can either try to negotiate a smaller balance with your creditors on the amount due or allow a debt settlement agency to handle it for you. Debt settlement agencies are often able to reduce the overall payment of your debts by 30% or more. This means, there's a great chance you can reach a settlement of 70% or less of the original amount you owed. However, you will pay a fee for their services, and your credit may take a beating during the process.

File for bankruptcy in Arkansas

Bankruptcy is the final option, and it is only advisable if you are seriously behind on your debts and see no way out. There are two main types of bankruptcy that everyday consumers can file: Chapter 7 and Chapter 13.

A Chapter 7 bankruptcy results in total elimination of your consumer debt, but you will need to meet certain income requirements to qualify.

A Chapter 13 bankruptcy can result in a partial satisfaction of your debt, but you may be required to pay part of it back. Chapter 13 is best for those who have assets they want to protect, such as a home. Both types of bankruptcies will result in significant damage to your credit, and it may be impossible for you to obtain loans or rent a place to live for a period of time afterward.

Use these debt relief programs in Arkansas

If you are a resident of Arkansas, you may qualify for these federally-funded programs that are specifically designed to help Arkansans find their financial footing. Check out these Arkansas debt relief programs:

  • Transitional Employment Assistance (TEA): Arkansas' version of TANF, this program offers time-limited cash assistance to needy families with (or expecting) children. TEA also offers work training and self-sufficiency courses to parents.
  • Arkansas Work Pays: A post-employment that assists prior TEA program participants with similar services and offers a monthly cash assistance payment to participants as well.
  • Rural Community Grant Program: Offers grants of up to $15,000 to residents of towns of less than 3,000 in population and unincorporated rural areas.
  • ARKids First: This program offers health insurance to kids living in Arkansas who live in low-income households.

These are just a few programs that can help you find the debt relief you need in Arkansas.

Are you being sued for a debt in Arkansas?

If you are being sued for debt in Arkansas, the first step to winning your case is to respond. Many people think they can ignore debt lawsuits to make them go away, but if you do not respond to a Summons for debt collection in Arkansas within 30 days, you will lose by default. This gives the debt collector or creditor the right to garnish your wages, freeze your bank account, or put liens on your property to get the money back.

So, you should draft an Answer to your debt lawsuit as soon as you receive notice of it. Make sure to respond to each claim listed in the Complaint document, include your affirmative defenses, and send a copy to the plaintiff after you file the Answer in court.

Use SoloSuit's Answer form to draft a response to your debt lawsuit in Arkansas.

Check out this video to learn more about the 3 steps you should take to respond to a debt collection lawsuit:

What is SoloSuit?

SoloSuit makes it easy to respond to a debt collection lawsuit.

How it works: SoloSuit is a step-by-step web-app that asks you all the necessary questions to complete your answer. Upon completion, you can either print the completed forms and mail in the hard copies to the courts or you can pay SoloSuit to file it for you and to have an attorney review the document.

Respond with SoloSuit

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