There are many causes that are linked to financial troubles. Some common reasons include heavy debt, home foreclosure, divorce, illness, or loss of a job.

In fact, the average credit card debt in Alaska is a whopping $7,552 per person. In addition, foreclosure rates are also as staggering, one out of every 3,826 AK homes is currently in foreclosure.

If you can relate to the scenarios above, then you are more than likely facing other personal issues that come with being in debt. The fear of losing your automobile, home or your income can drain a person mentally & physically. You may have even considered Filing for Bankruptcy .

If you are thinking “Should I File Bankruptcy?” you are undoubtedly not alone. Just under a million people file bankruptcy each year in the US. Bankruptcy is a tool provided by the US Government to help struggling Americans find relief from heavy debt. You may want to research bankruptcy if it’s best for you.

What Is Bankruptcy?

Bankruptcy offers people the time to resolve their debt while still working with lenders in a legal capacity. It is initiated by an individual filing a Petition with their nearest bankruptcy court. The Petition can be filed by a person or by spouses jointly. When the bankruptcy is done, the filer will ‘exit’ with a fresh new start.

Throughout the bankruptcy process, a trustee is appointed to oversee the deatils of the matter. His or her responsibilities will vary and depend on whether the person has filed for Chapter 7 or Chapter 13 bankruptcy.

Did you know that Alaska ranks #51 in the nation for bankruptcy filings. In 2017 the number of personal bankruptcies was approximately 56 out of every 100,000 residents.

What Is The Difference Between Chapter 7 And Chapter 13?

People in Alaska, who claim bankruptcy, will elect to file under Chapter 13 or Chapter 7 of the U.S. Bankruptcy Code. What is the difference? Take a look at the descriptions below for more information:

Chapter 7

In exchange for dissolving all past due debts, the trustee of the bankruptcy will liquidate the assets, such as cars, homes, and other property of value in a Chapter 7 Bankruptcy proceeding.

Debtors that were listed on the bankruptcy filing will be repaid with the proceeds collected during liquidation

Chapter 13

If you have the means to pay some of your debts, a chapter 13 bankruptcy plan may work for you. The individual will be allowed to retain his or her valuable assets over a 3- to 5-year period.

In order to decide which chapter an individual can file, he or she will have to determine their ability to repay under the Bankruptcy Means Test.

What Is A Bankruptcy Means Test?

The ultimate goal of the Bankruptcy Means Test is to determine who is eligible to apply for debt forgiveness through a Chapter 7 Bankruptcy. It takes into account your:

  • income and expenses
  • household size and composition
  • debt-to-income ratio

For those who do not qualify for a Chapter 7 filing, he or she will be able to file for Chapter 13, as described above.

What Are Bankruptcy Exemptions?

Specific states have certain exclusions that are enacted by congress as federal bankruptcy exemptions for filers. These exemptions will determine what you are able to retain throughout and after Chapter 7. In a Chapter 13 situation, the exemptions will determine what amount you will have to pay certain financial institutions in your repayment plan.

Unless otherwise noted, all law references are to the Alaska Statutes.


  • Up to $72,900. Joint owners may each claim a portion, but the total may not exceed $72,900.

Personal Property

  • Apartment or condo owners’ association deposits.
  • Burial plot; needed health aids; money held in mortgage escrow accounts after July 1, 2008; and tuition credits under advance college payment contract.
  • Motor vehicle up to $4,050, if market value is no more than $27,000; pets up to $1,350; jewelry up to $1,350; and household goods, clothing, books, musical instruments, and family portraits and heirlooms up to $4,050.
  • Personal injury and wrongful death recoveries, to the extent wages are exempt; cash or other liquid assets up to $1,890 or $2,970 for the sole wage earner with some restrictions.
  • Proceeds from damaged, destroyed or lost exempt property.
  • Building materials.


  • Weekly net earnings up to $473, or up to $743 if sole wage earner in a household: If no regular pay, up to $1,890 paid in any month, or $2,970 if sole wage earner in household.


  • Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans).  
  • IRAS and Roth IRAs to $1,283,025.
  • Teachers, judicial & public employees, and elected officers, as to benefits accruing.
  • ERISA-qualified benefits, if deposited more than 120 days before filing; medical savings accounts.
  • Payments being received from other pensions.

Public Benefits

  • Alaska longevity bonus, crime victims’ compensation and federally exempt public benefits. Prescription drug benefits for senior care. Alaska benefits for low-income seniors. Unemployment compensation.
  • Workers’ compensation.
  • 20% of Permanent Fund dividends (this is income distributed to residents from the state’s natural resources).
  • General relief assistance.
  • Assistance to blind, elderly and disabled adults:

Tools of Trade

  • Implements, books or tools up to $3,780.

Alimony and Child Support

  • Child support if received from a collection agency.
  • Alimony, to extent wages are exempt.


  • Medical, surgical, and hospital benefits. Disability benefits.
  • Life insurance or annuity contracts to a total of $500,000.
  • Fraternal benefit society benefits.

Want to know if you can include Student Loans in Bankruptcy or Medical Bills in Bankruptcy? Check out our Bankruptcy FAQ’s section.

Filing Bankruptcy Alone vs. Filing With An Attorney

You are not required by law to hire a lawyer to declare relief. Individuals are allowed to represent him or herself as a pro se debtor. You will simply contact the local bankruptcy court and obtain all forms and requirements directly through them. Going it alone is not an easy task.

Filing Bankruptcy without an Attorney

A simple Chapter 7 case that doesn’t have a lot of debtors or assets may be easy to manage on your own.

A basic bankruptcy that may not require an attorney might look like:.

  • Your income is below the state median;
  • You have no property;
  • Your debts will be considered dis-chargeable.

Working With An Attorney

Generally speaking, it is usually in one’s best interest to work with a bankruptcy lawyer. A bankruptcy lawyer is there to represent you and not the creditors.

An attorney is also accustomed with exemption laws. In addition, they can come up with creative strategies to keep your assets through practical repayment strategies that are fair to everyone involved.

While you may have the fight and ability to manage a Bankruptcy on your own, it tends to make things a lot easier on an already stressful situation, especially when there is so much at stake.

What Does Bankruptcy Include?

Once you file for bankruptcy in AK, the courts put in place an order called an Automatic Stay. This order will stop debt collection calls, wage garnishments, and additional claims. Keep in mind that payments regarding child support and criminal cases will still need to be made during this time.

In any event, Bankruptcy will be able to include:

  • credit card debt
  • protection from eviction
  • avoidance of foreclosure
  • utility bills
  • medical expenses

Again, unless you are filing a complex Chapter 13 case, you will lose all assets associated with a Chapter 7 Bankruptcy protection. You will, however, be able to prevent any and all collections from occurring as long as they were incurred before the date of filing and discharge.

Final Thoughts And Considerations On Filing For Bankruptcy In Alaska

As you can see, there a lot of information associated with successfully filing for bankruptcy and then exiting it unscathed or satisfied. Only a licensed bankruptcy attorney can guide you through this arduous process, particularly when it comes to complex cases. Be sure to hire someone you respect and trust.

Bankruptcy Courts In Alaska

Old Federal Building
605 West Fourth Avenue
Anchorage,AK 99501
Alaska Bankruptcy Court

Federal Building and United States Courthouse
101 12th Avenue
Fairbanks,AK 99701
Alaska Bankruptcy Court


Additional Alaska Resources

Foreclosure Help Program

Disability SSDI Benefits