Bankruptcy is a legal procedure that allows an individual or business to have some or all of their debts discharged. It is typically considered as an option of last resort, because while it can stave off financial disaster, it has some substantial long-term consequences warranting careful consideration of the costs and benefits. Bankruptcy is governed by federal law, and proceeds in federal courts. So, the procedure for filing for bankruptcy in Alaska will be very similar to the procedure anywhere else in the U.S. However, individual bankruptcy courts have different rules for exemptions, so it might be a good idea to consult with a local attorney in Kenai, Alaska before filing.
Chapter 7 Bankruptcy in Kenai, Alaska
In Kenai, Alaska, there are 2 commonly-used forms of consumer bankruptcy: Chapter 7 and Chapter 13. Chapter 7 bankruptcy involves liquidation of some of the debtor's assets. It requires some percentage of the debtor's property to be sold in order to pay off as much of his or her debt as possible. However, the majority of property that most people own is exempt. This typically includes homes, vehicles, insurance policies, and retirement accounts. These do not need to be sold.
Once the non-exempt property is sold, the rest of the dischargeable debt is absolved. Some types of debt, however, is non-dischargeable, including student loans, criminal fines, and others. If most of your debt in Kenai, Alaska is not dischargeable, Chapter 7 may not be the best option.
Chapter 13 Bankruptcy in Kenai, Alaska
In Kenai, Alaska, Chapter 13 is substantially different from Chapter 7. Chapter 13 may or may not be the best choice for you; this depends on the facts of your specific situation. Chapter 13 bankruptcy does not discharge debt. Instead, it restructures it. This involves the bankruptcy court coming up with a new payment plan that supersedes the terms of the arrangements that gave rise to the debt in the first place. This results in an adjusted payment plan that the debtor should find manageable, if he or she can make a few sacrifices.
Which Type of Consumer Bankruptcy Should I File in Kenai, Alaska
This depends entirely on the facts of your specific case. If you have a decent amount of steady income, and a large amount of non-exempt property which you don't want to part with, Chapter 13 might be the best option for you. If most of your property is exempt, and you don't have much steady income, Chapter 7 might be the best option.
In any case, it would be a good idea to consult a local bankruptcy attorney in Kenai, Alaska. Your attorney can make an educated judgment as to what your best option is, and advise you accordingly (of course, the choice to file for bankruptcy is ultimately yours).