2023 Guide to Debt Consolidation and Relief in Arkansas

Arkansas consistently ranks near the top for per-capita consumer debt, coming in at No. 7 with an average of $43,257 in non-mortgage debt. That’s an 8.2% increase between 2021 and 2022. 

Arkansas is also the fifth poorest state, with a poverty rate of 16.80%. The state has seen some recent economic growth, but residents continue to face such challenges as limited access to quality education, health care and jobs.

Due to these factors, many Arkansans struggle with debt. If you’re one of them, here’s everything you need to know to become debt-free.

How to Become Debt-Free in Arkansas

If you’re an Arkansan looking for help with debt, here is a look at your four main options.

1. Debt Consolidation Loan

Works best for: People with 670+ credit scores

Debt consolidation loans involve using a new, larger loan to pay off your other unsecured debts, including credit cards. A debt consolidation loan should typically have a lower interest rate than your current debts to be effective. 

This leaves you with one monthly payment and one creditor, saving money and simplifying your payments.

READ MORE: How to consolidate your credit card debt

2. Debt Consolidation Company / Debt Consolidation Program

Works best for: Anyone with more than $10,000 in unsecured debt who is struggling to make their payments and wants to avoid bankruptcy. 

Debt settlement involves negotiating with creditors to repay less than the total amount they owe, sometimes as a lump sum and sometimes as a longer-term payment plan. 

In Arkansas, debt settlement can help you pay off different forms of consumer debts, including:

  • Credit cards/lines of credit
  • Personal loans
  • Department store cards
  • Old judgments
  • Student loans in default
  • Other unsecured loans or debts

To make debt settlement work, you must stop paying your debts for three to six months until your creditor charges off the debt. This will damage your credit score but will incentivize the creditors to negotiate. Once settlements are reached, and payments are made, your credit score will rebound. 

Pro tip: The average debt settlement customer ends up debt-free while paying about 75% to 80% of the total enrolled in the program after all fees are paid. 

READ MORE: Is debt settlement the fastest way to get out of debt?

Debt Settlement Risks
  • Your creditors aren’t obligated to settle
  • If a creditor refuses to settle, you could end up having to pay accrued interest and late fees
  • Missed payments will show up on your credit report
  • You may have to report the forgiven amount as income tax to the IRS

Arkansas Debt Consolidation Companies

Looking for a debt consolidation agency in Arkansas to help you get a handle on debts? Here are a few firms that could help:

Best Overall: DebtHammer

DebtHammer helps borrowers overwhelmed by unsecured debts ranging from payday loans and tribal loans to credit cards and medical bills. 

After a free consultation to review your situation, the DebtHammer representative will offer you a menu of options. You will decide on the course of action you prefer. These options may include debt settlement, debt consolidation, bankruptcy or others. DebtHammer requires a minimum debt of $7,500 for program enrollment or $1,000 in payday loans. The company charges 25% of the total enrolled debt.

READ MORE: DebtHammer review

Though based in Texas, DebtHammer currently provides solutions to residents of Arkansas, Arizona, Alaska, Alabama, California, Delaware, Florida, Georgia, Illinois, Kansas, Louisiana, Maine, Massachusetts, Michigan, Montana, Nebraska, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Rhode Island, South Carolina, Tennessee, Texas, Virginia, West Virginia and Wyoming. Some service options may not be available in all states.

Click here to schedule a free consultation.

More Debt Relief Companies

  • Lighthouse Financial Solutions: 7123 I-30, Little Rock, AR 72209; (501) 413-7347
  • Debt Hero Little Rock: 300 S Rodney Parham Rd, Little Rock, AR 72205; (501) 235-8245
  • Debt Negotiation Services Debt Settlement Company: Boynton Beach, CA (561) 964-6404 thednsway.com
  • Alleviate Financial Solutions 4 Park Plaza Suite 1500, Irvine, CA; (800) 308-2935 alleviatefinancial.com
  • Guardian Litigation Group: 17922 Fitch Suite 150, Irvine, CA;  (949) 312-4226 guardianlit.com
  • New Era Debt Solutions: 330 Wood Rd., Suite B Camarillo, CA;  (805) 303-8773 neweradebtsolutions.com
  • Global DS 675 W Indiantown Rd. Jupiter, FL;  (866) 677-5044 globaldsgroup.com
  • InCharge Debt Solutions: Orlando, FL; (800) 565-8953 incharge.org
  • Golden Financial Services Debt Settlement Corporation: Lake Worth, FL, (619) 600-5189 goldenfs.org
  • National Debt Relief 180 Maiden Ln 30th floor, New York, NY; (800) 300-9550 nationaldebtrelief.com
  • DebtBlue: 1125 E Campbell Rd Suite 200, Richardson, TX; (855) 269-9462 try.debtblue.com

Arkansas Debt Settlement Attorneys

  • Hertzberg Law Firm of Arkansas: 4285 N Shiloh Dr #108, Fayetteville; (479) 303-5555 hoglaw-nwa.com
  • Pray Law Firm: 3807 McCain Park Dr # 108, North Little Rock; (501) 771-7733; praylawfirm.com
  • Foster Law Firm: 21941 Interstate 30 #1, Bryant, AR: (501) 481-3094; www.fosterlawbankruptcy.com
  • Crawley Law Firm: 2702 S Culberhouse St Suite N, Jonesboro, AR; (870) 972-1150; www.crawleylawfirm.com
  • Niblock & Associates: 5701 S University Ave, Little Rock; (501) 213-1517; www.niblocklaw.com
  • DeLoache Law Office: 512 W Washington Ave, Jonesboro, AR; (870) 932-4433; www.deloachelawoffice.com
  • Cash Law Firm: 424 W 4th St #B, North Little Rock; (501) 588-8094; www.cashlawoffice.com
  • Center For Arkansas Legal Services: 901 S 21st St, Fort Smith, AR; (501) 376-3423; www.arkansaslegal.org
Eligible Debts

When seeking debt relief in Arkansas, it’s important to note that not all types of debt are eligible. Debts that can be included in the state’s debt settlement programs include:

  • Credit cards
  • Department store cards
  • Signature loans
  • Personal lines of credit
  • Old repossessions
  • Other unsecured debts
  • Old judgments
  • Private student loans in default
Ineligible Debts

Debts that don’t typically qualify for debt settlement in Arkansas include:

  • Home mortgages
  • Federal student loans
  • Car loans
  • Other secured debts
  • Credit Union debts
  • Medical bills

3. Debt Management

Works best for: People with primarily credit card debt. Many credit counseling agencies work exclusively with credit card debt (and thus won’t be a help if you need to consolidate medical bills or student loans.)

A debt management program will usually reduce the interest rates on your credit cards from the current average of about 20% to somewhere around 9%. This will lower your monthly payment. However, unlike debt settlement, you will repay the full amount you owe, plus a lower amount of interest. The program usually takes 3-5 years to complete. 

Pro tip: It’s important to note that only 55% to 70% of customers who enroll in DMPs successfully complete the program. If you enroll in a Debt Management Plan but don’t complete it, your financial situation could worsen. 

So, for example, if you had $5,000 in credit card debt and were paying 25% interest, your monthly interest rate would be $105. If you reduce the interest to 8%, you’ll pay $33 a month in interest. That’s a $72 savings that you could apply to reducing your debt and paying it off faster.

These programs are usually set up and administered by nonprofit credit counseling agencies. 

Like with debt settlement, debt management does not involve a loan. Credit scores won’t matter. But if you default on payments, your creditor could raise the interest rate back to its original amount. 

READ MORE: Debt management vs. debt settlement

Credit counseling agencies in Arkansas

  • Credit Counseling of Arkansas (CCOA): 1111 E Zion Rd, Fayetteville, AR; (479) 521-8877; www.ccoacares.com
  • Lighthouse Financial Solutions: 7123 I-30, Little Rock, AR; (501) 413-7347
  • Money Management International: 7101 W 12th St Ste. 200-E, Little Rock; (501) 399-4322; www.moneymanagement.org
  • Consumer Credit Counseling Services: 1621 N College Ave #1, El Dorado, AR; (870) 864-0365; www.consumercredit.com
  • Access Credit Management: 11225 Huron Ln #222, Little Rock; (501) 664-2922; arcollectors.com
  • Griffins Financial Services LLC: 4425 Jefferson Ave Suite 101A, Texarkana, AR; (903) 748-2670
  • Credit Repair: 11701 I-30, Little Rock; (501) 451-6145
  • Ar Credit Solutions: 406 N Spruce St, Searcy, AR; (501) 278-5553
  • Million Dollar Credit; (501) 777-8075

4. Bankruptcy

Works best for: People who can see no other way to get out of debt within the next five years, who’ve already suffered significant credit score damage or who’ve tried one or more of the other options and failed. 

For some Arkansans seeking debt relief, bankruptcy could offer a fresh start. The two main types of personal bankruptcy are:

  • Chapter 7: Usually the most common option for individuals, Chapter 7 involves selling off (liquidating) the debtor’s assets to repay their creditors. Afterward, any remaining eligible debts are erased. Chapter 7 cases usually last 4 to 6 months.
  • Chapter 13: With Chapter 13, the debtor gets to keep most or all of their property and assets. Instead, they must set up a 3 or 5-year payment plan with their creditors to pay as much of their debts as possible. These cases are usually much more complicated and often require a bankruptcy attorney.

Most people don’t get to choose which type of bankruptcy they file. For instance, to qualify for Chapter 7, you must first pass a means test.

READ MORE: Types of bankruptcy explained

Arkansas Bankruptcy Exemptions 

Chapter 7 debtors in Arkansas are allowed to choose whether to apply the Bankruptcy Code’s federal exemptions or Arkansas’ state exemptions. They are not permitted to use both, and cannot use a mixture of state and federal exemptions. Here’s a comparison of some of the top exemptions:

Type of exemptionFederal lawArkansas law
Homestead$23,675 of equity in your principal place of residence$800 to $2,500, or 80 acres with no regard to value, depending on the state’s two homestead exemption options
Personal property$12,625 aggregate value on household goods, plus federal wildcard exemption applicable Clothing is exempt without regard to value; $200 or $500 aggregate for all other personal property
WagesAll income that you’ve earned but haven’t yet received becomes part of the bankruptcy estate60 days’ worth of earned but unpaid wages (minimum $25 per week)
Retirement/pensionExempt, but with a cap of about $1.28 million on IRAs and Roth IRAsIRA contributions up to one year before filing bankruptcy with a maximum of $20,000 (subject to an aggregate limit like personal property)

What is the Statute of Limitations on Debt in Arkansas?

The statute of limitations determines whether a creditor can legally sue a debtor (borrower) over an unpaid debt. After the statute of limitations ends, the creditor can no longer initiate a lawsuit on the outstanding debt. However, they can still try to collect the debt.

In Arkansas, the statute of limitations depends on the type of debt:

  • Credit card debt: 5 years
  • Auto loan debt: 5 years
  • Mortgage debt: 5 years
  • Medical debt: 2 years
  • State tax debt: 10 years

READ MORE: State statutes of limitations

Debt Collection Laws in Arkansas

Arkansans are protected by the federal Fair Debt Collection Practices Act (FDCPA). However, it does not apply to creditors in Arkansas. You are only covered by the FDCPA if your creditor sells your debt to a third-party debt collector. 

However, the state also offers certain state protections to residents.

The Arkansas State Board of Collection Agencies may revoke, suspend, or refuse to provide a license to a debt collection agency if they find: 

  • False or misleading statements have been made on an application
  • Ownership of the agency has been sold or transferred
  • The collection agency is not licensed
  • Documents designed to resemble official documents (like court documents or forms) have been distributed
  • Using illegal or unethical debt collection techniques
  • Using obscenities or foul language
  • Calling or otherwise contacting debtors at their place of employment unless all other efforts at contact have been unsuccessful
  • Threatening physical harm or violence
  • Violating postal laws in an effort to collect a debt

READ MORE: How to deal with debt collectors

Where to Make a Complaint in Arkansas

The Arkansas Attorney General investigates and prosecutes violations of the Consumer Fraud Act and other state and federal consumer protection laws. A private citizen can also bring an action for a violation of the Consumer Fraud Act within a year of the date of the alleged violation.

If debt collectors are harassing you, file a complaint with each of the following entities:

Depending on the debt collector’s conduct, you may have the right to sue or countersue the debt collector. Please consult an attorney if you believe your rights have been violated.

More Arkansas Debt Statistics

Arkansas residents are ranked seventh in the U.S. for per capita debt, but have the country’s second-lowest average salary, behind only Mississippi.

Arkansas averageNational average
Average salary$48,570$59,428
Median household income$52,123$70,784
Per capita household income$29,210$36,430
Household debt$43,257$59,580
Auto loan debt$25,418$22,612
Credit card debt $5,327 $6,194 
Mortgage debt$150,680$236,443
Median mortgage payment (30-year fixed)$1,147$2,823 
Average student loan debt $33,333$37,338
FICO credit score694714
Average VantageScore678701
Retirement savings$364,395$255,000
Child poverty22%5.2%
Overall poverty 16.8%11.6%
2022 consumer bankruptcy filings10,410387,721
2022 foreclosures1,964248,170
Identity thefts reported5,1861,108,609 
Percentage of unbanked residents3.4%4.5%
Average credit utilization ratio22.02%31%

Payday Lending Laws in Arkansas: Prohibited

Arkansas is regulated by the following payday lending statutes:

  • House Bill 2021 (HB.2021)
  • Arkansas Constitution

All payday loan operations are banned unless they comply with the state’s 17% usury cap.

The maximum rate that can be charged on a consumer loan or credit sale is the lesser of 17% or 5% over the Federal Discount Rate. 

READ MORE: States where payday loans are illegal

Debt Resources for Arkansas Residents Facing Hardship

Arkansas offers a variety of local and state programs for residents looking for help with debt or finances. Among other things, these resources can provide low-cost or free childcare, job-related education and training, healthcare, and legal aid. Some programs can also help with the cost of rent or utilities.

Some of the main food banks in the state include:

  • Arkansas Food Bank (Little Rock): 4301 W 65th Street, Little Rock; (501) 565-8121
  • Food Bank of Northeast Arkansas (Jonesboro): 3414 One Place, Jonesboro;  (870) 932-3663 
  • Food Bank of North Central Arkansas (Norfork): 14215 Hwy. 5 South, Norfork, Ark.; (870) 499-7565
  • River Valley Regional Food Bank (Fort Smith): 1617 South Zero, Fort Smith, Ark; (479) 785-0582 
  • Northwest Arkansas Food Bank (Springdale): 1378 June Self Drive Springdale, Ark.; (479) 872-8774
  • Harvest Regional Food Bank (Texarkana, Ark.): 3120 East 19th, Texarkana, Ark.; (870) 774-1398

How to File for Unemployment in Arkansas

Unemployment insurance claims may be filed online using the EZARC (EZ Arkansas Claims) System at www.ezarc.adws.arkansas.gov.

To be eligible, you must be:

  • unemployed
  • physically and mentally able to perform suitable work
  • available for suitable work
  • making a reasonable effort to find work
  • free of participation or direct interest in a labor dispute
  • free of disqualification

In addition to the above, a waiting period of one week must be served before benefits are payable to you.

If you have questions once you’ve filed, call 1-844-908-2178.

State Hardship Programs

  • ARKids First: This free healthcare program helps families with children as well as single parents. It offers medical or dental care as well as low-cost or free insurance. Call 1-888-474-8275 for details.
  • Arkansas Community Clinics and Medical Centers: Residents of all income levels can get low-cost, high-quality medical care at community clinics. Clinics offer help with prescriptions, medications, checkups and dental cleanings.
  • SNAP: In Arkansas, SNAP is available to help low-income households subsidize their food costs. Apply for a reloadable card and use it like you would a debit card at most grocery stores.
  • WIC: The Women, Infants and Children program is designed to help certain people, including low-income women with young children, afford food costs. Most people who qualify for SNAP or TANF benefits also qualify for this program.
  • LIHEAP: The Low-Income Home Energy Assistance Program is federally funded and helps income-qualified families with heating and cooling costs.
  • CAFCP: The federal Child and Adult Food Care Program reimburses eligible organizations and daycare home providers for nutritious meals served in care settings. The program is administered by the U.S. Department of Agriculture.

Cost of Living in Arkansas

Annual Mean Wage (All Occupations)$52,906
Median Monthly Rent$1,382
Value of a Dollar$1.15
Cost of Living90.3
Cost of Living Rank41
Grocery Cost Index95.4
Housing Cost Index76.3
Utilities Cost Index91.8
Transportation Cost Index92.2
Miscellaneous Cost Index99.1
Source: World Population Review (updated September 2023)

The Bottom Line

Many Arkansans struggle with debt due to lower-than-average wages and a higher-than-average poverty level. But the state also offers some debt relief and hardship programs to help residents, including debt settlement and debt consolidation. If you’re struggling with debt, knowing your options is essential. That way, you can start rebuilding your financial life without feeling overburdened by debt.

Scroll to Top