Bankruptcy in Alaska
Alaska was purchased from Russia in 1867. The price? Under 2 cents an acre. At that same time, a stamp cost 3 cents and a dozen eggs cost 14 cents. Prices have risen during the last 150 years and many Alaskans are faced with financial difficulties.
If you are considering bankruptcy (and didn't qualify for Dancing with the Stars), this article is for you. We'll illustrate how Alaska bankruptcy law differs from the laws of other states; discuss the differences between Chapter 7 and Chapter 13 bankruptcy; help you to find and select a bankruptcy lawyer; and prepare you to work with a bankruptcy attorney.
How Alaska Bankruptcy Law Differs from the Laws of Other States
Federal law dictates bankruptcy procedure (e.g. what papers are filed when and the other legal hoops you have to jump through); this means it's the same in every state, including Alaska.
On the other hand, property rights (i.e. bankruptcy exemptions) are created by both federal and state law. This means that there is variance among the states.
- You can protect up to $70,200 of home equity.
- You can protect up to $3,900 of equity in a car.
- You can protect some personal possessions, health aids, jewelry, building materials, pets, wages, 529 Plans, and retirement accounts.
Exemptions determine how much property you can keep under Chapter 7 and how much debt you have to pay back under Chapter 13.
Your Choices in Filing Bankruptcy in Alaska: Chapter 7 or Chapter 13
Alaska's median income for a single person is $54,272 and for a family of four is $90,781. If you make less than these amounts, you're entitled to file under Chapter 7.
- Chapter 7 discharges credit card, medical bill, and personal debts.
- This process takes 6 months.
- If you make more than the median income, you may still qualify if you have high expenses.
- 84% of Alaska's 989 2011 bankruptcies were Chapter 7.
If your income is higher or you have non-dischargeable debts, Chapter 13 is likely appropriate.
- Debts are reorganized, so that you can afford to repay them over 3 to 5 years.
- Some debts may be discharged during the reorganization.
- 16% of Alaska's 2011 bankruptcies were Chapter 13.
A qualified bankruptcy attorney will help you determine which Chapter serves you and your individual situation best.
How to Find and Select a Bankruptcy Attorney
When searching for an attorney, focus on those who are highly experienced in the practice of bankruptcy law.
You can ask loved ones, the bar association, and professional advisors for referrals. In addition, you can pin point a search by entering "Find an Alaska Bankruptcy Attorney" into an Internet search engine.
Once you've narrowed down your list of potential attorneys, have a brief consultation with each of them. Then, choose the attorney with whom you are most comfortable.
How to Prepare to Work with a Bankruptcy Attorney
- Research and learn as much as you can about bankruptcy.
- Make a list of questions.
- Organize and document your finances, including debts, assets, expenses, and payments made.
Your attorney will give you a form asking for financial details. Your investment of time and effort will pay off exponentially when bankruptcy frees you from debt. As you might prepare for a big Alaskan storm, prepare to work with your attorney.