How to File for Bankruptcy in Alaska

Like all states, the economic downturn has affected Alaska’s economy and employment rate.  In fact, in recent years, the unemployment rate has increased one percent per year.  That means many people are facing lower incomes and higher debt, often leading them to consider bankruptcy.  Is that always the right option, which type of is best, and how should one prepare?

Finding a Bankruptcy Attorney

These are difficult questions that generally, only an experienced bankruptcy lawyer can help a consumer answer.  In addition, there are key elements to consider and benefits to take advantage of that only an expert can provide.  However, it is crucial to interview several lawyers before deciding on one that is right for each debtor.  Not only is their success rate important, but their level of experience and their ethical record of accomplishment are crucial.

Bankruptcy Options

The financial situation of each debtor must be considered carefully before determining whether to file for Chapter 7 or Chapter 13 bankruptcy.  In Alaska, 83% of all those filing for bankruptcy choose Chapter 7.  That is often because they do not choose to take this step until they have no assets, leaving them with little or no property to protect.  In Chapter 7, the bankruptcy trustee may confiscate property that is not exempt and liquidate it in order to satisfy at least some of a consumer’s creditors before discharging those eligible debts that remain.

Chapter 13 bankruptcy is generally more appropriate for those who have personal property they wish to protect.  They generally have enough disposable income each month to pay a limited amount on each bill.  Chapter 13 allows them to reorganize their finances and debt, and with the help of the trustee, form a five-year repayment plan.

Alaska Exemptions

For those choosing to file Chapter 7 bankruptcy, there are some statutes protecting essential property and a portion of their assets from liquidation.  These exemptions can be found under both federal and state laws; however, Alaska allows only state exemptions.

Alaska’s key exemptions include:

Filing the Petition

Once a consumer and their bankruptcy lawyer determine which type of bankruptcy to file, they must complete the credit counselling requirement, process the paperwork and proceed through the bankruptcy process, including:

• Outlining their financial situation, including income, disposable income, and debts
• Filing and receiving an automatic stay on all debt collections
• Working with the bankruptcy trustee to plan discharge or repayment of debts
• Attending a required 341 meeting with creditors to outline the plan and answer any questions

Once completed, the process leaves the debtor free to begin again, debt-free.