When Congress voted in favor of the Bankruptcy Abuse and Consumer Protection Act (BAPCPA) and it was eventually signed into law by President Bush, very few people truly understood the magnitude of the changes. The biggest difference in the bankruptcy laws of today versus the one’s of pre-reform is the fact that consumers can no longer choose which chapter bankruptcy they want to file if their income exceeds the median income of their state. Here are the median income figures for Alaska as of 2006:

2-person families: 66,125
3-person families: 70,378
4-person families: 71,781
5-person families: 84,085
6-person families: 68,818
7-or-more-person families: 71,250

If your income does exceed the median in Alaska, you would be forced to pass the means test in order to qualify for Chapter 7 bankruptcy. For example, if you are in a three person household and your income is $80,000 per year, you would only be able to file bankruptcy if you passed the means test, which is basically a set of questions and answers that are used to determine whether or not you can afford to pay more than $125 per month to satisfy your debts. If it is determined that you can afford to pay off your debts, then you would be required to file Chapter 13 bankruptcy, which obliges you to turn over your monthly disposable income to a court trustee for a period of up to five years. Needless to say, this is not ideal, especially when you consider the fact that bankruptcy will leave you with bad credit for a period of up to 10 years.

Rather not deal with the hassle of an Alaska bankruptcy? Fill out a form and PayingPaul.Com will match you with a pre-qualified debt company for help!

Or if you are interested in learning more about credit and debt issues in your state, feel free to browse these resources:

Alaska Consumer Credit Counseling Services
Alaska Bankruptcy Laws
Alaska Debt Collection

Alaska Filing Statistics

2004: 1,444
2005: 2,214
2006: 577

Like many other states, Alaska felt the effects of the new bankruptcy law, as evidenced by the 73 percent decrease in both Chapter 7 & 13 personal bankruptcy filings between 2005 and 2006. This can be attributed to the fact that qualifying to declare Chapter 7 has become much more difficult since bankruptcy reform in 2005. With Chapter 13 as their only option, more Alaska consumers are turning to alternatives like debt settlement and credit card debt counseling.