When you have more debt that you can actually repay, and you have come to the point where you cannot even make the monthly payments with any regularity, bankruptcy may be the answer. Before you file bankruptcy, you must understand current Alaska bankruptcy laws, and how they affect your assets.

Bankruptcy Exemptions

Under Alaskan bankruptcy law, some of your assets are exempt from your creditors when you declare bankruptcy. The exemptions in Alaska include the following:

• Up to $70,200 for your personal residence
• Up to $1,300 in jewelry
• Heirlooms, household goods, family pictures, musical instruments, books and clothing, up to $3,900
• Health supporting materials or products
• Burial plots
• Up to $1,300 for pets
• Up to $3,900 in a vehicle worth no more than $26,000
• Personal injury or wrongful death recoveries
• Proceeds form life insurance
• Proceeds for personal injury or wrongful death claims
• Disability benefit payments
• Medical, hospital or surgical benefits
• ERISA-qualified benefits (must have been deposited over 120 prior to filing bankruptcy)
• Child support and alimony
• Property in a business partnership
• Public benefits
• Weekly net wages ($456 for an individual and $716 for a sole wage earner for a family)
• Up to $3,640 of tools for a trade, including books

If you owe money for your car, you can reaffirm the debt within 45 days of your bankruptcy 341 meeting. If you do not reaffirm the loan, your creditor may repossess your car, even if you continue paying your payments.

Chapter 7 Bankruptcy Information

Under Chapter 7 bankruptcy, Alaskans have the ability to wipe out most of their debts. While certain types of debts, like child support and back taxes, must be paid regardless of bankruptcy, other types of debt, like credit card debt, are wiped out under Chapter 7. In order to file Chapter 7 bankruptcy, you must pass a means test, which means you must make at or below the median income in Alaska.

Chapter 13 Bankruptcy Information

Under Chapter 13 bankruptcy, you will enter into a repayment plan designed by your trustee to attempt to pay off your debt load in approximately five years. While Chapter 13 does not eliminate debts, it provides protections against the actions of collections agencies and creditors, giving you some breathing room as you attempt to repay what you owe.