2010/09/24

Alaska Bankruptcy Exemptions

Alaska bankruptcy exemptions refer to the legal provisions applicable in the state of Alaska, as per which, the debtors who are declared bankrupt by the court are allowed to either keep some of their assets or get equivalent value of cash depending upon the maximum amount of money that can be exempt. For example, if a certain asset is worth $5000 but the maximum value that is exemptible as per the law is only $3000, the bankruptcy trustee will sell off that asset and pay you $3000 in cash. But, it is important to note that some states also allow wild card exemptions, which can be used to exempt those properties that are otherwise not exemptible. In our example, if the wild card exemption is $2000, you can use it in addition to the $3000 of exemption and thus can keep that asset that is worth $5000. Unfortunately, Alaska laws do not have any provision for wild card exemptions.

The Exemptions Apply To The Equity In Your Properties

It is also important to note that Alaska bankruptcy exemptions apply to the value of equity in your assets and properties, and not the total current sale value. For example, if you have a car worth $5000 but there is still an outstanding balance of $3500 on car loan, you will be able to exempt either $1500 (which is the equity value) or the maximum value of exemption, whichever is less. Here again, it is important to note that the laws allow you to keep that property if you are current with your car loan and commit to continue making the monthly payments as before.

Married Couple

In cases where a married couple files for bankruptcy jointly, the exemptions limit just gets doubled.

Keeping A Property That Does Not Fall Completely Under Exemptions

If you have a property worth $5000, where the maximum Alaska bankruptcy exemptions can only be $3500, you can still save that property and keep it by paying the remaining balance ($1500) to the bankruptcy trustee.

Wages

If the debtor is the sole wage earner for his/her family, he/she can exempt a maximum of $716 of weekly net earnings. In other cases, the maximum limit cannot exceed $456. If the person does not earn regular wages, the exemption limit is $2860 (paid in any month) if he/she is sole wage earner; in other cases, the limit is only $1820.

Public Benefits

Most public benefits are allowed to be exempted in full, such as worker’s compensation, unemployment compensation, general relief assistance, federally exempt public benefits, compensation to crime victims, Alaska longevity bonus, AFDC, and adult assistance to the disabled, blind and elderly. Besides that, you can also exempt 20% of permanent fund dividends. If you are receiving any tuition credits as part of an advance college tuition payment agreement, that is also exemptible under Alaska bankruptcy exemptions.

Pensions

Pensions that can be exempted in Alaska include medical savings accounts and ERISA-qualified benefits. You can be eligible for exemptions for ERISA-qualified benefits only the deposits are at least 120 days old from the date of filing. Pension benefits to elected officers, judicial and public employees, and teachers are also exemptible in full. Besides that, you can also exempt Roth and traditional IRAs up to a maximum value of $1,095,000 per individual.

Personal Properties

Personal properties can be exempted as per the following details –
- Pets up to $1,3 00
- Motor vehicle up to $3,900 (applicable only if the current sale value of the vehicle is not more than $26000)
- Jewelry up to $1300
- Health Aids needed – 100%
- Burial Plot – 100%
- Building materials – 100%
- Heirlooms, household goods, family portraits, clothing, musical instruments, and books – up to $3900 (in total)

Wrongful death recoveries and the proceeds for destroyed, damaged or lost exemptible property are also exemptible under Alaska bankruptcy exemptions laws.

Tools Of Trade

The maximum value that can be exempted under this category is $2800 and is applicable for tools of trades, books, and implements.

Insurance

The exemptions allowed for insurance benefits are as follows –
- hospital, surgical, and medical benefits – 100%
- life insurance contract loan – up to $10000
- Fraternal benefit society benefits
- Disability benefits
- Insurance proceeds for wrongful death (up to the maximum value of exemptions allowed for wages)

Miscellaneous

Under miscellaneous category, the following exemptions can be applicable –
- Permits for limited entry into Alaska Fisheries
- Liquor licenses
- Child support payments that a collection agency is paying to you
- The alimony payments may also be exemptible but only up to the maximum amount of money allowed to be exempted for wages.
- Properties of business partnership are exempt in full

Homestead

Up to $70,200 in principle residence, subject to certain liens. It is important to note that Alaska bankruptcy exemptions for homestead properties are applicable only if you own that property for at least six months before the date of bankruptcy filing.

Filed under Bankruptcy, Bankruptcy Exemptions