Bankruptcy is a legal procedure that allows an individual or business to have some or all of their debts discharged. It is usually considered as an option of last resort, because while it can stave off financial disaster, it has some significant long-term consequences warranting careful consideration of the costs and benefits. Bankruptcy is controlled by federal law, and proceeds in federal courts. So, the process for filing for bankruptcy in Alaska will be very similar to the process everywhere 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 lawyer in Kodiak, Alaska before filing.
Chapter 7 Bankruptcy in Kodiak, Alaska
In Kodiak, Alaska, there are 2 commonly-used types 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 usually includes homes, vehicles, insurance policies, and retirement accounts. These do not have to be sold.
Once the non-exempt property is sold, the rest of the dischargeable debt is excused. Some forms of debt, however, is non-dischargeable, including student loans, criminal fines, and others. If most of your debt in Kodiak, Alaska is not dischargeable, Chapter 7 may not be the best option.
Chapter 13 Bankruptcy in Kodiak, Alaska
In Kodiak, Alaska, Chapter 13 is quite different from Chapter 7. Chapter 13 may or may not be the best choice for you; this depends on the facts of your particular situation. Chapter 13 bankruptcy does not eliminate debt, it restructures it. This involves a court coming up with a new repayment plan designed to be manageable for the debtor. This new plan sets aside the terms of the original agreements that created the debt in the first place. This creates a new payment structure, usually involving a single monthly payment, that the debtor should find manageable.
Which Type of Consumer Bankruptcy Should I File in Kodiak, Alaska
The answer to this question depends strongly on your individual situation. If you have enough stable income to manage a payment plan, and a lot of non-exempt property that you are unwilling to part with, Chapter 13 may be a good option. If you don't have much stable income, and most of your property is exempt, Chapter 7 might be better.
In any case, it would be a good idea to consult a local bankruptcy lawyer in Kodiak, Alaska. Your lawyer 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).