Bankruptcy is a legal procedure that allows an individual or business to have some or all of their debts discharged. It is normally considered as an option of last resort, because while it can stave off financial disaster, it has some considerable 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 Valdez, Alaska before filing.
Chapter 7 Bankruptcy in Valdez, Alaska
In Valdez, Alaska, there are 2 commonly-used forms of consumer bankruptcy: Chapter 7 and Chapter 13. Chapter 7 bankruptcy involves a liquidation of some of the debtor's assets, which pays off part of his or her debt. Once this is done, the remaining debt is absolved. Fortunately for debtors, many types of property are exempt from liquidation, including homes, vehicles, basic personal items, and retirement accounts.
Once qualified assets are sold, and the money turned over to the creditors, most remaining debt is absolved. However, there are certain types of debt that cannot be absolved in bankruptcy, including student loans, taxes, child support, and criminal fines. If most of your debt is non-dischargeable, it may not be a good idea to file for bankruptcy in Valdez, Alaska.
Chapter 13 Bankruptcy in Valdez, Alaska
In Valdez, Alaska, Chapter 13 is very different from Chapter 7. Chapter 13 may or may not be the best choice for you; this depends on the facts of your individual 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 contracts that gave rise to the debt in the first place. This results in an altered 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 Valdez, Alaska
Which Bankruptcy type to file under depends heavily on the facts of each particular case. If you have a steady stream of income (enough to make a payment plan manageable), and a large amount of non-exempt property that you don't want to part with, Chapter 13 may be best for you. If you don't have a steady income or large amounts of non-exempt property, you may be better off filing for Chapter 7.
In any case, you should talk with a local Valdez, Alaska bankruptcy attorney. Your attorney can advise you of your options and inform you of their likely outcome. This will make it much easier for your to make an informed choice.