Bankruptcy in Fairbanks, AK
When Fairbanks residents launch into business ventures, bankruptcy is usually the furthest thing from their minds. However, this is a viable and legitimate strategy when it comes to protecting yourself and your business. If you find yourself in a position where you need to declare bankruptcy, it may be wise to have an experienced Fairbanks attorney by your side.
Types of Bankruptcy in Fairbanks, 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. In Fairbanks, AK to be approved, individuals must prove they have a hardship that prevents them from staying current on their financial obligations. Keep in mind that not all debts qualify. Some liabilities, such as child support arrears, delinquent taxes, alimony, and student loans generally do not qualify for discharge. Consumers who find themselves falling behind in debt can file either Chapter 7, 11 or 13. To determine which option is right for you, you’ll need to assess your goals, assets, and income. You should also consider working with an experienced bankruptcy attorney.
Fairbanks residents filing for bankruptcy will most likely appear before the U. S. Bankruptcy Court for the District of Alaska.
Chapter 7 Bankruptcy
Many people find Chapter 7 to be the right solution for their circumstances because it provides them with the opportunity to start over financially. However, before filing for Chapter 7 bankruptcy, you should thoroughly assess your income and ability to repay what you owe. You should also speak with a bankruptcy attorney in Fairbanks who can help you to decide if a liquidation plan is right for you.
Typically, individuals approved for Chapter 7 lack stable income. Or, they have experienced a change in circumstances that has resulted in an inability to manage their debts. Though Chapter 7 erases debts, the tradeoff is you may have to give up certain possessions, such as your home, car or some other assets. However, once you file your petition, an automatic stay goes into effect that requires all collection activity against you like foreclosures and garnishments, to stop temporarily. However, the automatic stay does not prevent all collection attempts. For example, if you owe child support or restitution for a criminal case, you are still liable for those payments.
Those living in Fairbanks who file chapter 7 bankruptcy should be aware that a stay is placed on creditors trying to collect from you when you file. Once this stay is in place, a creditor will not be able to pursue payment. They may even be unable to legally call you on the telephone. However, you will have to take a Means Test to make sure that your income level qualifies for protections under chapter 7.
Chapter 11 Bankruptcy
Chapter 11 bankruptcy is more complex than other types of bankruptcy. It is often used by businesses and certain types of people. It allows petitioners to restructure their debts with a reorganization plan, so they are easier to manage over a determined length of time, 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 to pay what they owe. It does allow debtors to negotiate with their creditors a reorganization plan that enables them to stay current on their debts moving forward.
An Online Guide is provided by the state of Alaska for those in Fairbanks serving as trustees under Chapter 11. There are certain filing requirements for those seeking protections under Chapter 11, and failing to follow the guidelines can result in the dismissal of your case and leave you vulnerable to creditors. Filings such as current monthly income, unsecured creditors, and claims against your property are all paramount and must be filed. An experienced Fairbanks attorney can be a great help to you in these matters.
Chapter 13 Bankruptcy
Chapter 13 Bankruptcy is a debt restructuring or wage earners plan. In Fairbanks, AK after you file, the courts will assign a trustee to examine your liabilities and assets and ability to pay bills. Unlike other types of bankruptcy, Chapter 13 involves you restructuring your debt with a three to 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 give you the opportunity to have some or most of your debts discharged.
Alaska Bankruptcy Law states that Fairbanks residents who are behind in their mortgage payments, and desire to keep their property, must file for Chapter 13 bankruptcy. However, you will have to present a repayment plan, including a detailed schedule of repayment, to the court.
The Bankruptcy Process in Fairbanks, Alaska
There is never an ideal time to declare bankruptcy. However, if you are unable to pay off what you owe within five years, filing for bankruptcy can help you to lessen the negative impact on your situation and help you get back on track.
In Fairbanks to begin the filing process, gather all of your financial records, including monthly expenses, debts, assets and annual income. This information is crucial to give the courts an accurate picture of your circumstances. Failure to provide all necessary information can result in your petition being denied.
The first step for someone living in Fairbanks that is facing debt, is to determine if bankruptcy is the best course of action. If it is, you must then determine which type of bankruptcy will best help protect you. Once this is established, you might seriously consider consulting with an experienced attorney in Fairbanks, as bankruptcy is a very complicated area of the law. You should then file as quickly as you can, as this will keep your creditors at bay.
The Bankruptcy Statutes of Alaska contain several exemptions that can benefit you. For example, you can exempt your residence up to $72,900, and your motor vehicle up to $4,050, but only if the total value of the vehicle is less than $27, 000. Under Alaska Law, pensions, health benefits, and life insurance are also exempt from creditors.
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, usually 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 of completion from the credit counseling course that you took, the courts will reject your bankruptcy petition.
Work With an Experienced Fairbanks, Alaska Lawyer
Hiring a local bankruptcy lawyer in Fairbanks during this process can help reduce the costly risks of self-representation in court. An experienced bankruptcy lawyer understands state and federal bankruptcy laws. He or she can help you understand which laws apply to your case. They can especially help by telling you which debts that can be discharged or can’t be discharged. 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, such as debt consolidation. 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 Fairbanks can guide you through the entire bankruptcy process. We can even help you connect with an attorney across Alaska state lines.