It's easy to slide into debt. All it takes is a couple of rough months, a personal
injury, a death in the family or unemployment to turn a manageable existence into
one filled with strife, unending calls from creditors, or worse a frozen bank account.
There are several types of bankruptcy; Chapter 7, Chapter 9, Chapter 11, and
Chapter 13. For individuals and families, a Chapter 7 bankruptcy, also known
as a straight or liquidation bankruptcy can ease the financial strife that unwelcome
circumstances have caused.
Why a Chapter 7 Bankruptcy Can Help You
When a debtor files a Chapter 7 bankruptcy
he or she has the opportunity to discharge or dismiss most, if not all credit
debts. When a bankruptcy goes on a debtors file, creditors are required to charge
off the debt, stop calling, and desist pursuing you for the unpaid amounts. In the
eyes of the law you debt will be wiped clean. This can enable you to start over
financially, helping you to live within your means.
Reasons why Alaskan residents have filed for a Chapter 7 bankruptcy include:
- Garnished Wages
- Large Amounts of Unsecured Debt (such as credit cards)
- Home Foreclosure
- Car Repossession
- Owe IRS or State Taxes
The Drawbacks to a Chapter 7 Bankruptcy
Of course there are some drawbacks to debtors who file for a bankruptcy. Initially
after filing, a debtor's credit score can lower 50-75 points, and the bankruptcy
filing will stay on a debtor's credit history for ten years. Although a bankruptcy
will remain on the credit history, a filer will still be able to purchase a house,
get a loan for a car, or open a credit card. The pros do outweigh the cons for those
who are struggling under the weight of significant debt.
How You Can Qualify for a Chapter 7 Bankruptcy
In order to qualify for a bankruptcy, debtors are required to pass a means test.
The bankruptcy laws were changed in 2005 under the Reform Act. These laws require
each debtor filing for bankruptcy to fall or below the medium income for the
state they reside in. For individuals or families living in Alaska that level changes
based on the family size. For a single earner, the median income level is
$51,950. For a family of size of two the level raises to $75,460, a family of three
$81,477, and a family of four, $85,964. For each family member over four people,
a filer may add $7,500 per person.
If your income level exceeds the median income level, you still might qualify for
a Chapter 7 bankruptcy, but additional information about your financial history
may be required for the Bankruptcy Court. Also if a debtor has filed for
a bankruptcy in the last eight years, you will not be able to file until the eight
years has lapsed.
What Debtors are Allowed to Keep After Filing
When a debtor files for any bankruptcy, Chapter 7, 13, or any other type of bankruptcy,
you will still be allowed to keep some personal property and assets and reaffirm
or retain certain debts. The amount and type of property each debtor is allowed
varies from state to state. The state of Alaska allows debtors to choose state or
federal exemptions in their bankruptcy. This allows Alaskan residents to have greater
options when it comes to claiming property they wish to keep.
What is is exempt? Here is a brief list of assets that Alaskan residents can
keep after filing for a Chapter 7 bankruptcy:
- Housing Exemption - A house up to $70,200 in value.
- Personal Property
- $1,3000 in personal jewelry
- $3,900 in household goods, books, photographs, and heirlooms
- $1,300 value of pets
- 100% value in burial blots
- Motor Vehicle - Up to $3,900 in value
- 100% of proceeds from lost, damaged or destroyed property that has been claimed
as exempt
- 75% of disposable earnings after taxes
- Benefits
- 100% of ERISA benefits
- 100% of specific retirement accounts
- Federal civil service disability, retirement, and death benefits
- 100% of worker's compensation
- 100% of child support payments
- 100% alimony support payments
- 100% Social Security benefits
- Life Insurance - Up to $13,000, which includes annuity contracts, accrued dividends
and the loan value.
Who Can Help You with the Bankruptcy Process
You may have heard that anyone can file for bankruptcy on their own. This is true.
Alaskan residents can fill out the appropriate paper work, pay the initial
$306 new petition fee, and then pay any additional fees ($30 for amendments to your
case, $176 for any motion fees, etc). However, when a debtor files a case without
the assistance of an attorney, he runs a significant risk of the case being dismissed.
If a case is dismissed, a case can be reopened for an additional $260, but all paperwork
and proceedings must be correct in order to safely close the case and rid yourself
of credit debt. For the best results, it is highly recommended that you speak to
a chapter 7 bankruptcy attorney who knows the specific laws surrounding a bankruptcy,
Chapter 7 filing.
Once you have filed your case, expect the proceedings to last for about three to
six months. During this time you will have to be present in court for a short meeting
with your creditors. Your attorney will handle most of the communication, and all
of the paperwork throughout the process. Contact a local Alaskan Chapter
7 bankruptcy attorney today about your financial struggle. You may be
able to erase all your debt, and start over!
Alaska Bankruptcy And District Courts
Old Federal Building
605 West Fourth Avenue, Suite 138
Anchorage, Alaska 99501-2248
Phone: (907) 271-2665
Federal Building and United States Courthouse
101 12th Avenue, Room 332
Fairbanks, Alaska 99701-6236
Phone: (907) 456-0349
Federal Building
648 Mission Street, Room 507
Ketchikan, Alaska 99901-6534
Phone: (907) 247-7536
Federal Building and United States Courthouse
222 West 7th Avenue
Anchorage, Alaska 99513-7500
Phone: (907) 677-6100
Federal Building and United States Courthouse
101 12th Avenue, Room 332
Fairbanks, Alaska 99701-6236
Phone: (907) 451-5791
Huff A. Saunders Federal Building
709 West Ninth Street, Room 979
Juneau, Alaska 99801-1807
Phone: (907) 586-7458
United States Post Office and Courthouse
940 East Front Street
Nome, Alaska 99762
Phone: (907) 443-5216