Bankruptcy is a tough situation and you may feel like a failure for considering it. We want you to know that there is no judgment in bankruptcy. It is a well designed legal proceeding to help people take their life and finances back. Filing for bankruptcy can be beneficial for both the debtors and the creditors. Debtors are able to relieve the burden of debt on their lives and creditors are able to receive some of the money they’re owed.
There are two main types of bankruptcy in the state of Utah for individuals and families, Chapter 7 Bankruptcy, and Chapter 13 bankruptcy. Chapter 7 is a type of bankruptcy filing where you hand over all of your assets to a trustee and they sell everything that isn’t exempt by the court. After they’ve sold everything, they pay you, the debtor, everything that wasn’t exempted. They then take the proceeds from the sales and use it to pay off your creditors while keeping a percentage for themselves. Chapter 7 is a great option for debtors that just want a fresh start.
Chapter 13 is a type of bankruptcy filing where you are able to keep some of your assets, structure out a payment schedule to pay off the debts over time, and reinstate your original mortgage agreement. Since Chapter 13 bankruptcy allows you to negotiate longer payment terms with your creditors and allows you to keep some valuable property that wouldn’t be considered exempt, it is seen as more admirable to most bankruptcy filers.
There are two additional types of bankruptcy in the state of Utah, chapter 11, and Chapter 12 bankruptcy. Chapter 11 is for businesses and individuals with a considerable amount of income and assets. Chapter 12 is reserved for family farmers. Continue reading to learn more about Bankruptcy in Utah and if you want to talk to an expert, please contact us here at Hepworth Legal!
What Can Bankruptcy do for me?
- Bankruptcy eliminates the legal obligation to pay most or all of your debts. It is designed to give you a fresh start or a safe way to pay all of your debts in a timely fashion.
- Bankruptcy can prevent the repossession of your car or other property.
- Bankruptcy can stop wage garnishment and debt collection harassment.
- Bankruptcy can stop foreclosure on your house or mobile home and give you the opportunity to catch up on missed payments.
- Finally, Bankruptcy can restore or prevent termination of utility service to your home.
What Does it Cost to File For Bankruptcy?
- In the state of Utah, It costs $281 to file for Chapter 13 bankruptcy and $306 to file for chapter 7 bankruptcy. If you hire an attorney you will also have to pay the attorney’s fees for the bankruptcy process. The court may allow you to pay the bankruptcy filing fee in installments.
Is Chapter 7 Bankruptcy Right For Me?
- If you are wanting a completely ‘fresh start’ Chapter 7 bankruptcy might be for you. It completely discharges your debts and uses the proceeds from liquidating your property to pay off your creditors. If you want to keep property like a car or a home, Chapter 7 bankruptcy wouldn’t be a good option. The goal with Chapter 7 is to wipe the slate clean and start over.
Is Chapter 13 Bankruptcy Right For Me?
- If you want to keep your car or home, you might want to consider Chapter 13 bankruptcy. It protects your property and restructures your payments with your creditors. It defends you from being harassed by debt collectors and allows you to pay that debt overall longer period of time. If you have the income to make your debt payments and still be able to pay for your day to day necessities, chapter 13 bankruptcy could be a better option for you.
Utah Bankruptcy Exemptions.
There are few exemptions for property or equity that aren’t able to be discharged in a bankruptcy filing. Click here to read the full list of property exemptions.
- Homestead property that doesn’t exceed $42,000 in value
- Burial plot for the individual and the individuals family
- Health aids reasonably necessary to enable the individual to work or sustain health
- Veteran Benefits
- Money received for child support
- Money received for alimony
- Valuable items and heirlooms that are sentimental to the individual up to a value of $1000.
Our experienced bankruptcy attorneys will listen to your concerns in a calm and safe environment. We’ll advise you and help you design a plan to make the harassment from the creditors stop.