Bankruptcy Law in Utah
Understanding your options when debt becomes unmanageable.
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This page is for informational purposes. For legal representation in a bankruptcy or debt matter, contact us to discuss a referral.
Bankruptcy is a federal legal process that allows individuals and businesses to eliminate or restructure unmanageable debt under the protection of the federal bankruptcy court. Utah residents file in the U.S. Bankruptcy Court for the District of Utah. The two most common forms of consumer bankruptcy are Chapter 7 (liquidation) and Chapter 13 (reorganization).
Chapter 7 Bankruptcy
Chapter 7 allows eligible debtors to discharge most unsecured debts (credit cards, medical bills, personal loans) through a relatively quick process — typically 3–6 months. Most personal property is protected by Utah's exemptions. Debtors must pass a means test based on income to qualify for Chapter 7.
Chapter 13 Bankruptcy
Chapter 13 allows debtors with regular income to reorganize debt into a 3–5 year repayment plan. It is commonly used by homeowners who want to save their homes from foreclosure, or by debtors who do not qualify for Chapter 7 due to income. Debtors keep all property but must make monthly plan payments.
The Automatic Stay
Filing for bankruptcy immediately triggers the "automatic stay" — a federal court order that stops most collection actions including lawsuits, garnishments, foreclosure, repossession, and harassing calls from creditors. The stay provides immediate relief while the bankruptcy case proceeds.
Utah Bankruptcy Exemptions
Utah law allows bankruptcy filers to protect certain property from liquidation, including: home equity up to $30,000 (homestead exemption), a vehicle up to $3,000, retirement accounts (fully protected), and household furnishings and personal property. Federal exemptions are also available as an alternative.
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While Hepworth Legal does not currently offer bankruptcy representation directly, we can refer you to experienced bankruptcy counsel in Utah.
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