Bankruptcy in Badger, AK
Do you worry that you are alone in considering bankruptcy?
Statista shows that 29.75 per 100,000 Alaskans filed for financial discharges in 2021. Those who received approval received an opportunity to start over. However, denials could have led to continued struggles because they could not make their case to the court system.
Badger residents deserve competent representation and legal advice. You can start to plan your recovery through this article about state and local law below.
Types of Bankruptcy in Badger, Alaska
Bankruptcy is a legal process that helps individuals and businesses get a fresh financial start. It eliminates a portion of or all of their debts or financial liabilities. Consumers who fall behind can file either Chapter 7, 11, or 13. To determine which option is appropriate, you need to assess your goals, assets, and income.
In Badger, AK, individuals must prove they have a hardship that prevents them from meeting their financial obligations. But not all debts qualify. Some liabilities, such as child support, taxes, alimony, and student loans, cannot discharge.
Chapter 7 Bankruptcy
Chapter 7 is the right solution for many people because it offers the opportunity to start over financially. However, before filing for Chapter 7 bankruptcy, you should thoroughly assess your income and ability to repay. You should also speak with a bankruptcy attorney in Badger who can help you to decide if a liquidation plan is right for you.
Typically, individuals approved for Chapter 7 lack stable income or have experienced a change in financial circumstances. Though this type of bankruptcy erases debts, the tradeoff is you may have to give up some possessions.
However, once you file your petition, an automatic stay goes into effect and requires collection activity to stop temporarily. Nonetheless, the automatic stay does not prevent all collection attempts. Child support or restitution for a criminal case remains a financial obligation.
According to Experian, there are a few crucial requirements to qualify for Chapter 7 bankruptcy. You cannot have filed for this protection in the last several years and completed a credit counseling program. Furthermore, your income needs to be less than the median income in the state. As of 2022, this household income threshold is $77,790.
Chapter 11 Bankruptcy
Chapter 11 bankruptcy is more complex than the others. More often than not, businesses take advantage of the opportunities it provides.
Chapter 11 allows petitioners to restructure their debts with a reorganization plan. So they are easier to manage over a determined period, usually four to 18 months.
The main benefit of Chapter 11 bankruptcy is that it does not require petitioners to sell off or liquidate their assets. It allows debtors to negotiate a reorganization plan with their creditors that enables them to stay current on their debts.
By and large, it is not easy for an individual from Badger to qualify for Chapter 11. You can see this reality expressed in the number of filings from 2021. There were only 470 people who attempted to get this debt relief compared to 279,649 businesses.
Chapter 13 Bankruptcy
Chapter 13 Bankruptcy is a debt restructuring or wage earners plan. After you file in Badger, AK, the courts assign a trustee to examine your assets and liabilities.
Unlike other types of bankruptcy, Chapter 13 involves restructuring your debt with a three to a five-year repayment plan. The flexibility of this repayment plan will depend on what property you want to keep and how steady your income is. It may also allow you to have some or most of your debts discharged.
As with other types of bankruptcy, the first requirement is to complete a debtor education course. Generally, an individual or organization in Badger will complete this task online. A few of the approved providers to consider are:
The Bankruptcy Process in Badger, Alaska
There is never an ideal time to declare bankruptcy. However, if you cannot pay off what you owe within five years, filing for bankruptcy can help you to lessen the negative impact.
The process begins by gathering your financial records. These documents will include monthly expenses, debts, assets, and annual income. This information is crucial to give the Badger courts an accurate picture of your circumstances. Failure to provide all necessary information can result in a denial of your petition.
You will also have to make crucial decisions about exemptions. State and federal law provide opportunities to retain certain items or a percentage of their value. For example, you could keep your car if its value is below one of these thresholds. But you will want to choose wisely since you cannot cherry-pick from both options.
At least six months before you file for bankruptcy, eliminate unnecessary spending. Do not run up the balances on your credit accounts. You’ll also need to complete an approved credit counseling course online or over the phone.
Credit counseling is necessary to help you learn financial literacy and help you learn better financial habits. Once you complete the course, you’ll receive a certificate of completion to include in your filing. If you don’t have the certificate from the credit counseling course, the courts will reject your bankruptcy petition.
Work With an Experienced Badger, Alaska Lawyer
Hiring a local bankruptcy lawyer in Badger during this process can help reduce the costly risks of self-representation in court. An experienced bankruptcy lawyer understands state and federal bankruptcy laws. They can help you know which legislation applies to your case, in particular, which debts can discharge. An experienced Alaska attorney can also offer you guidance to improve the outcome of your case.
Keep in mind that there are debt management alternatives and financial resources that may benefit you more than bankruptcy. Though bankruptcy is an attractive solution, it is best as a last resort.
Do you need immediate help? Then one of our experienced lawyers in Badger can guide you through the entire bankruptcy process. We can even help you connect with an attorney across Alaska state lines.
Submit a request online or call us today at (866) 345-6784 to get in touch with an experienced lawyer in your area!