If you're searching for debt relief in Arkansas, you're not alone. Even though the cost of living here is more affordable than the national average, debt is a reality for many residents —just as it is everywhere else. As overwhelming as managing multiple debts can be, there are solutions available in Arkansas.
In this post, you will learn what your options are, select the best support and other details you need to know that can help you get out of your financial hardship.
Why Choose Professional Debt Relief Assistance?
Arkansas residents seeking debt relief should consider professional assistance that provides:
- Personalized advice tailored to your specific financial needs and debt situation.
- Proven strategies and viable solutions for debt elimination.
- Transparent support and guidance throughout the debt relief process.
Consider consulting with qualified professionals about your debt situation to begin your journey toward financial independence.
Who Qualifies for Debt Relief in Arkansas?
We need to consider certain factors when it comes to understanding who qualifies for debt relief programs in Arkansas. These include the amount of debt, the type of debt relief strategy and your personal financial situation.
While the eligibility criteria differ for each program, here are the common denominators:
- People with steady income but cannot keep up with monthly payments.
- Those with sufficient funds available to repay at least a portion of their debt (e.g., debt settlement.)
- People with a high unsecured debt of $10,000 or higher (those with lesser outstanding debt, such as $5,000, can still opt for certain types, like DMPs).
- Low-income groups can qualify for specific financial hardship programs.
Arkansas Debt Relief
There are debt relief options in Arkansas that can help you reduce, manage or eliminate your unsecured debts smoothly. Here are the debt relief options available to Arkansas residents.
Decision-Making Framework
- Assess Debt Type: Prioritize high interest unsecured debts (credit cards, payday loans).
- Evaluate Income Stability: Steady income? Consider consolidation. Unstable? Explore settlement.
- Legal Risk: If being sued, consult a licensed attorney (Ark. Bar Association).
Debt Settlement
In Arkansas, debt settlement is an option for residents with $10,000 or more in unsecured debt who can negotiate with creditors to make a lump sum payment and forgive the rest. If you still have funds to cover the settlement amount and fees.
Also, Arkansas does not have state regulations on debt settlement companies. Be sure to research and vet your options. Prioritize companies accredited by the American Fair Credit Council (AFCC) and have a high BBB rating.
Pros
- Pay less than what you owe.
- Less severe than bankruptcy.
Cons
- Credit score drop of 80-150 points
- Tax liability on forgiven debt over $600
Debt Consolidation
Debt consolidation in Arkansas involves combining multiple debts into a single payment with improved terms and interest rates.
Updated Arkansas Rates (May 2025)
- 15-year fixed mortgage: 6.36%
- 30-year fixed mortgage: 7.02%
Consolidation Options
| Consolidation Loan | Balance Transfer Card | Debt Management Plan |
|---|---|---|
| Best For: Multiple high-interest debts | Best For: Credit card debt (<12 months payoff) | Best For: Structured repayment (5–7 years) |
| Risk Level: Moderate | Risk Level: High | Risk Level: Low |
Advisory: Avoid loans with origination fees exceeding 5% or APRs above 12%
The process goes differently for each type:
- Debt consolidation loan: The total outstanding balance from multiple unsecured debts is paid off with a single debt consolidation loan. Then you pay off the new loan with monthly installments at a reduced interest rate than the original debts.
- Debt consolidation program: Unlike a debt consolidation loan, this involves combining the payments instead of balances from multiple debts. The credit counselor negotiates on your behalf with your creditors for a modified plan with a reduced interest rate and an adjusted repayment timeline. You start making one monthly payment to the credit counseling agency which then redistributes payments to all creditors.
- Balance transfer credit card: This involves transferring total credit card balances from multiple credit cards to a new balance transfer credit card (preferably with a 0% introductory APR for a specific period). Then you pay down that combined high-interest debt at a lower interest rate. (Aim to pay off most of the balance during the introductory period before the APR increases).
Pros
- Save more on paying interest over time.
- The credit inquiry for the debt consolidation loan will temporarily reduce your credit score.
Cons
- Consistently making monthly payments can improve your credit score.
- Average credit history will reduce.
Credit Counseling
People in Arkansas can access free debt advice through non-profit organizations like Credit Counseling of Arkansas (CCOA). Credit counselors can support debtors by developing a suitable budget plan and helping them manage their debt. Besides acting in an advisory capacity they may also provide debt management plans (DMPs). This involves creating a more manageable plan with a longer repayment timeline and negotiating reduced interest rates.
Enhanced Risk Disclosures for DMPs: Late payments void negotiated rates. Average fee: $35–$75 per month.
Pros
- High-quality expert advice on managing debt and budgeting.
- May include monthly fees.
Cons
- A more structured plan that may be easier to follow.
- It can affect your credit utilization ratio because of closed credit accounts.
Bankruptcy (optional)
Let's say you have tried all the other debt relief programs Arkansas has available without much help. Bankruptcy is the 'last resort' solution you can opt for. It is a legal process that involves discharging some eligible unsecured debts or creating a court-supervised repayment plan.
Enhanced Risk Disclosures for Bankruptcy: Remains on credit report for 10 years; requires court-approved repayment plan (Chapter 13) or asset liquidation (Chapter 7).
Yes, it sounds daunting (filing for bankruptcy harshly impacts credit score and stays on the credit report for 7-10 years). But with careful planning and responsible financial choices, one can improve their financial situation over time. Consult with a qualified bankruptcy attorney or financial advisor for guidance.
Pros
- Stops harassing collection attempts and calls.
- Harsh impact on credit scores; it takes a long time to recover.
Cons
- The best answer to how to stop wage garnishment in Arkansas.
- Remains on the credit report for 7-10 years.
CASE STUDY: Rick from Pine Bluff
Rick S. is a retired veteran who was carrying $22,000 in debt- both from personal loans and credit cards. It was hard for him to manage timely payments with his fixed retirement income especially as the outstanding balance kept growing. He opted for a debt settlement plan that prioritized essential expenses and found relief from financial stress.
Outcome:
- Debt reduced by 38%
- Collection calls stopped
- Program period lasted 21 months
- Avoided losing his home and kept his limited income safe
Note: This case study is an illustrative example based on typical client experiences. Individual results may vary.
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Legal Safeguards for People Dealing with Arkansas Debt Relief
When you’re overwhelmed with debt, seeking relief is a smart and natural next step to improving your financial future. Although options are available, the process can be confusing and complicated. Especially if you’re not familiar with legal and financial jargon. The good news is there are protections and laws in place to protect consumers from deceptive or unfair practices that target financially vulnerable individuals.
Fair Debt Collection Practices Act (FDCPA)
This is a federal law that also benefits Arkansans by regulating debt collectors. For example, the FDCPA has rules governing the behavior of debt collectors when collecting debt. You can’t threaten or harass debtors, call them at unreasonable hours or use deceptive tactics to make them pay.
Arkansas has a state version of this, called the Arkansas Fair Debt Collection Practices Act (AFDCPA). This one focuses more on collection agencies rather than creditors or independent lawyers. This law protects consumers from unfair debt collection practices and ensures that all transactions are conducted in a respectful and transparent manner.
Consumer Financial Protection Bureau (CFPB)
This federal agency oversees the fair treatment of debtors from lenders, banks and other financial institutions. It safeguards consumers from abusive practices and ensures compliance with consumer financial laws.
2025 CFPB Debt Settlement Disclosure Rules: Under new federal regulations, debt settlement companies must provide clear written disclosures including:
- Total program costs and timeline estimates
- Risks to credit scores and potential tax consequences
- Alternative options like credit counseling
- Right to cancel within 3 business days
- Progress reports every 6 months during active enrollment
These enhanced protections strengthen consumer rights when evaluating debt settlement services in Arkansas.
Choosing the Right Help for Arkansas Debt Relief
When pursuing debt relief in Arkansas, it is extremely important to work with a trustworthy debt relief company that can provide the correct guidance for financial recovery. But there are some that prey on people when they are in such a vulnerable state. Luckily you can circumvent that if you focus on these following points when choosing the team that will represent your case.
Check out non-profit status
Check whether the debt relief companies you are considering for Arkansas debt relief programs are registered as 501(c)(3) non-profits. Yes, a non-profit status does imply a consumer-centric mission. But you should check first if they have certified credit counselors working for them who strictly abide by the Arkansas Attorney General's guidelines related to debt relief programs in Arkansas.
Check for accreditation
While it is not legally mandatory for organizations like debt settlement companies to have accreditations to work in Arkansas, it does add to their credibility. So do consider if they are accredited by FCAA (Financial Counseling Association of America) or NFCC (National Foundation for Credit Counseling) as it showcases their professional and ethical standards. Besides these, check out if they have a good BBB rating and other specific accreditations like AFCC (which applies specifically to debt settlement companies for example).
Review fee-related transparency
Legitimate organizations are typically open about their service fees upfront and explain the breakdown of their service costs. Check if they disclose their fee structure and explain ongoing charges (if any) carefully. Be cautious if they dodge questions or put any pressure on you to pay when you need emergency debt relief assistance in Arkansas without explaining things first.
Review their licensing
See if the company has valid state registrations and certifications in place. In Arkansas, it is mandatory for companies engaging in certain financial services to obtain licensing regulated by the state. You can find information about this from the consumer protection division in your state or the Arkansas Securities Department.
Similarly, Arkansas residents who are getting debt collection calls should check if the debt collectors are following state-specific regulations. It is mandatory for debt collectors in Arkansas to have licensing with the Arkansas State Board of Collection Agencies.
For more information about fair debt collection in Arkansas, please visit the Arkansas Attorney General's website.
Warning Signs to Avoid
When selecting debt relief assistance, avoid companies that exhibit these red flags:
- Request large upfront payments before providing services
- Promise "100% guarantee" to eliminate debt instantly
- Use high-pressure sales tactics or limited-time offers
- Refuse to provide written terms or a clear fee structure
- Lack of verifiable business address or customer service contact
- Claim they can remove accurate negative information from credit reports
- Advise you to stop communicating with creditors without a legal basis
- Are not properly licensed or accredited by recognized organizations
Additional scam indicators include companies that contact you unsolicited, request sensitive information over the phone, or guarantee specific outcomes that seem unrealistic.
Compliance Verification Checklist
Before engaging any debt relief company in Arkansas, complete this step-by-step verification process:
Step 1: Verify AFCC Accreditation
- Visit afcc.org/member-directory
- Search the company name in the official database
- Confirm current membership status (not expired)
- Check for any disciplinary actions or complaints
Step 2: Confirm State Licensing
- Check the Arkansas Securities Department database (securities.arkansas.gov)
- Verify business registration with the Arkansas Secretary of State
- For debt collectors: Confirm licensing with Arkansas State Board of Collection Agencies
Step 3: Validate Professional Credentials
- Request counselor certification numbers
- Verify through NFCC or FCAA member directories
- Confirm continuing education compliance
- Check individual counselor licensing where applicable
Step 4: Review Financial Standing
- Check Better Business Bureau rating and complaint history
- Review state attorney general complaint records
- Search federal court records for recent litigation
- Verify business insurance and bonding status
Step 5: Document Review Process
- Request and review all contracts before signing
- Verify fee structure matches initial disclosures
- Confirm cancellation policies and procedures
- Ensure compliance with 3-day right to cancel (federal requirement)
This comprehensive verification protects Arkansas consumers from fraudulent or unlicensed debt relief providers.
Arkansas Economic Overview (2025)
Understanding Arkansas's economic landscape helps inform debt relief decisions, as cost of living factors directly impact available options and repayment capacity.
Cost of Living Comparison (vs. National Average)
| Category | Comparison vs. National Average | Details |
|---|---|---|
| Housing | 22% below national average | Lower housing costs than the national average. |
| Utilities | 8% below national average | Utility costs are lower than the national average. |
| Healthcare | 1% above the national average | Healthcare costs are slightly higher than the national average. |
| Average Home Value | $217,895 (Zillow, 2025) | |
| Current Mortgage Rates | 6.36% (15-year), 7.02% (30-year) (Bankrate, May 2025) | |
Employment Trends
| Category | Details |
|---|---|
| Unemployment Rate | 3.7% (March 2025) (Arkansas Department of Commerce, 2025) |
| Job Openings | 5.9% in manufacturing, healthcare, and construction (Arkansas Department of Commerce, 2025) |
- Unemployment Rate: 3.7% (March 2025) (Arkansas Department of Commerce, 2025)
- Job Openings: 5.9% in manufacturing, healthcare, and construction (Arkansas Department of Commerce, 2025)
Retirement in Arkansas
| Category | Details |
|---|---|
| Annual Spending (Estimate) | 51211 |
| Reserves for Discretionary Spending (20%) | 10242 |
| Ideal Yearly Budget during Retirement | 61454 |
The regular income tax rates in Arkansas effective in 2025 include:
| Tax Rate | Income Bracket |
|---|---|
| 0% | <= $5,499 |
| 2% | $5,500 -- $10,899 |
| 3% | $10,900 -- $15,599 |
| 3.40% | $15,600 -- $25,699 |
| 3.90% | >= $25,700 |
Retirees in Arkansas get the following income tax exemptions:
- No tax on Social Security benefits.
- Arkansas residents 59½ years of age and older can exclude up to $6,000 of their retirement income (up to $12,000 for couples) from state taxes.
(Note: It applies to retirement savings from 401(k)s, pensions and other eligible retirement accounts.)
Source: CNBC, The Street
Insurance in Arkansas
| Category | Details |
|---|---|
| Average Premium per Month (Home Insurance) | $259 |
| Average Premium per Year (Home Insurance) | $3,103 |
| Average Coverage per Year (Auto Insurance) | $2,430 |
Additional statistics include:
| Statistic | Details |
|---|---|
| Percentage Enrolled in CHIP or Medicaid (2022) | Around 25% |
| Uninsured Residents (2023) | 9.20% |
| Residents with Medicare Insurance (2023) | Around 16% |
| People with Individual Insurance (2023) | 5.70% |
Sources: Axios NW Arkansas, Bankrate, Association of Health Care Journalists
Debt Collection Exemptions in Arkansas (2025)
The state of Arkansas allows the following exemptions for debtors in regards to collection attempts:
| Category | Exemption Details |
|---|---|
| Homestead | $2,500 equity |
| Vehicle | $1,200 equity |
| Bank Account Balance | <= $800 for singles / <= $1,250 for married couples |
| Wage Garnishment | ≤ 25% of disposable income or earnings > $217.50/week (30× federal minimum wage), whichever is lesser |
Arkansas Statute of Limitations
The following are the time limits that the state of Arkansas sets within which creditors can take legal action against debtors for unpaid debts.
| Debt Type | Time Limit | Legal Reference |
|---|---|---|
| Written Contracts | 5 years | [Ark. Code §16-56-111] |
| Oral Contracts | 3 years | [Ark. Code §16-56-105] |
| Credit Cards | 5 years | [Born v. Hosto & Buchan (2010)] |
Critical Legal Updates:
Lazard Bank v. Jones (2024): Oral acknowledgments of debt must be "clear and unambiguous" to restart the statute of limitations clock. Simple payment discussions or payment arrangements may not reset the limitation period.
Key Update:
Partial payments or written acknowledgments will reset the statute of limitations clock
Cities We Serve in Arkansas
We may help you with your debt relief process across many cities in the state of Arkansas:
- Little Rock
- Bentonville
- Fayetteville
- Hot Springs
- Pine Bluff
Reach out to qualified professionals today for a professional evaluation and start planning the next best step for your financial recovery!
Debt Relief Resources in Arkansas
If you are wondering "how can I get debt relief in Arkansas," here's a list of official resources you can turn to for support. These include both federal and local programs that are available to Arkansas residents for financial, medical and lifestyle assistance.
Neutral Presentation of Resources
- Credit Counseling of Arkansas (CCOA): Free budget coaching
- Arkansas Attorney General: Complaint portal for abusive collectors
| Program/Agency | Uses | Contact |
|---|---|---|
| Arkansas Attorney General's Office | Get guidance with handling finances and learn about fair debt collection practices. | Phone No: (501) 682-2007 or (800) 482-8982 Email: OAG@arkansasag.gov |
| Credit Counseling of Arkansas (CCOA) | This non-profit organization provides Arkansas residents access to financial seminars, debt management programs, free housing, budget and credit counseling, etc. | Phone: 1-800-889-4916 (Bentonville, Fort Smith), 479-521-8877 (Fayetteville) |
| National Foundation for Credit Counseling (NFCC) | Reach out to a certified credit counselor through NFCC. They may help you with crafting personalized action plans for Arkansas debt relief and provide useful financial education. | Phone: 800-388-2227 |
| Center for Arkansas Legal Services | This non-profit legal firm provides free Arkansas legal aid for debt issues to low-income residents, covering areas like property, health and family law. | Phone: 501-376-3423 |
| Legal Aid of Arkansas | They provide support with legal aid and support with Arkansas debt relief options for low-income families. | Phone: 1-800-952-9243 |
| Arkansas State Board of Collection Agencies | It regulates the activities of collection agencies within this state. Know about Arkansas laws on debt collection practices and consumer protection information. | Phone: 501-682-4500 Fax: 501-682-4535 |
| U.S. Department of Justice Approved Credit Counselling Agencies | When searching for a trustworthy Arkansas credit counseling agency or "Arkansas credit counseling services near me," refer to this curated list of state-approved agencies. | NIL |
There are other resources available too that can make your journey toward financial freedom from debt easier in Arkansas.
- Arkansas Transitional Employment Assistance (TEA). Similar to the federal T-ANAF program, TEA offers short-term financial assistance to low-income families in Arkansas, providing both cash support and employment opportunities.
- Community Assistance Grant Program. The Arkansas Economic Development Commission launched this program to support low-income Arkansas residents in achieving self-sufficiency and financial stability.
- Low Income Home Energy Assistance Program (LIHEAP). It is funded by the federal government, aiming to help eligible Arkansans with some utility bill payments.
- ARKids First. The program offers health insurance support for uninsured kids in Arkansas.
- Veterans Affairs Regional Loan Center. It helps veterans secure housing benefits available for disabled individuals, avoid foreclosures and more.
- Emergency Solutions Grant (ESG) Program. The program supports homeless individuals and families with financial assistance, rehousing, emergency shelters, and other services.
CASE STUDY: Denise from Forth Smith
After graduating recently Denise found herself trapped in high-interest credit card debt from her student expenses. She couldn't manage the dues on her own with her entry-level income. She then enrolled in a personalized debt relief plan tailored to her financial circumstances.
Outcome:
- Monthly payments reduced to $250
- Zero upfront fees
- Improved her credit score within one year
- Finished the program within 20 months
Note: This case study is an illustrative example based on typical client experiences. Individual results may vary.
Rebuilding Credit After Debt Relief
Successfully completing a debt relief program is only the beginning of financial recovery. Arkansas residents should focus on rebuilding their credit through these proven strategies:
Immediate Steps (Months 1-6)
- Obtain a secured credit card with a small limit ($200-$500)
- Set up automatic payments for all remaining obligations
- Monitor credit reports monthly through free services
- Keep credit utilization below 30% on all accounts
Medium-term Strategies (6-18 Months)
- Consider rent reporting services to build a positive payment history
- Add authorized user accounts from family members with good credit
- Establish small installment loans if income permits
- Maintain consistent employment and address history
Long-term Credit Building (18+ Months)
- Gradually increase credit limits as scores improve
- Apply for unsecured credit cards or personal loans
- Consider becoming a homeowner once credit stabilizes
- Build emergency savings to avoid future debt problems
The timeline for credit recovery varies, but most Arkansas residents see significant improvement within 12-24 months of completing debt relief programs.
Wondering how to proceed with your journey toward financial independence safely and in compliance with debt relief laws in Arkansas? Contact qualified professionals at 800-332-8913 for guidance and answers to your questions.
FAQs about Debt Relief in Arkansas
Written contracts (5 years), oral agreements (3 years). Key Update: Partial payments or written acknowledgments reset the clock.
Only for child support (up to 60%) or tax debts.
Submit a written request under FDCPA §805(c); violations incur $1,000+ penalties.
Yes, there are debt forgiveness programs from the federal government that you can opt for in Arkansas, such as income-driven repayment (IDR) forgiveness programs, PSLF, etc. There are state-centric programs too.
Negative entries related to debt can stay on the credit report in Arkansas for:
- Hard inquiries: 2 years
- Missed payments, foreclosures, repossessions, late payments: 7 years
- Bankruptcy discharge: 10 years
People have many protective rights under state laws and FDCPA that shield them from unfair and abusive practices by debt collection agencies in Arkansas. These include:
- Timeline and location for acceptable collection calls
- Having correct information about your rights
- Behavior of debt collectors during collection attempts (violence, threatening, profane language, etc., are prohibited)
- Right to refuse contact from collection agents
- Ability to get legal help or dispute the debt
Legal Disclaimer:
This content is for educational purposes only and does not constitute legal or financial advice. Debt relief services comply with all applicable Arkansas state laws and federal regulations, including the Arkansas Fair Debt Collection Practices Act (AFDCPA) and the Fair Debt Collection Practices Act (FDCPA). Results may vary depending on individual circumstances. Before enrolling in any debt relief program, consult with a qualified financial advisor or attorney licensed to practice in Arkansas.
About The Author
Loretta Kilday is an accomplished litigator and transactional attorney with over 30 years of experience in various fields, including debt collection and bankruptcy. Debt Consolidation Care is pleased to have her as the public voice of this organization. Her exceptional performance and dedication to her profession have enabled her to handle and resolve many cases, earning her a stellar reputation among her peers. Also, she has utilized her years of experience in training, mentoring, and leading junior attorneys and other associates, thus laying the foundation for a brighter future of legal practices.