Utah Bankruptcy Facts
Have you amassed an unmanageable amount of debt in Utah? Do you struggle to pay your bills and other expenses? Are creditors on your back, harassing you for payments? If so, you may be an ideal candidate for bankruptcy protection and we are here to ensure you obtain fast and simple debt relief.
Bankruptcy is a federal process that allows debtors to significantly reduce or possible even wipe out their financial obligations entirely. In Utah, there are a number of petitions that can be filed by both individuals and businesses who are struggling with financial burdens that are beyond their ability to handle, and it’s important debtors learn and understand the details of each to know what they can expect during proceedings. Bankruptcy can change your life, but if a mistake is made in filing, financial obligations can actually get worse.
Because there are a lot of details surrounding the bankruptcy process in Utah, it’s always a wise choice to solicit the expertise of an experienced bankruptcy lawyer so you know your case will be in good hands. Our site provides links to some of the most acclaimed attorneys in Utah to make it easy to choose a reputable legal professional who will make your needs a priority.
But before selecting an attorney, there are some important facts regarding the process that you should know if you plan to petition the Utah bankruptcy court for debt relief. Read on to find out what they are.
Bankruptcy Laws in Utah
Because bankruptcy is a federal process, Utah bankruptcy laws follow the same basic rules as any other state when it comes to the prerequisites required to be approved for bankruptcy protection and the steps to take once those requirements are met. As per the 2005 Bankruptcy Act, the first thing that must be done before bankruptcy can be approved is for the debtor to complete credit counseling in the six months immediately preceding the filing as well as a subsequent financial management course.
Once these prerequisites are completed, the debtor must pass what is known as the “Means Test” to determine if they are eligible for bankruptcy protection. The means test will compare the debtor’s average income for the six months prior to filing for bankruptcy with the state average for their household size and if that figure is lower than the Utah average, then the debtor automatically qualifies for Chapter 7 bankruptcy protection, the most commonly filed petition in Utah.
How Chapter 7 Bankruptcy Works
If you are petitioning the court for Chapter 7 bankruptcy protection once you have passed the means test, you can expect a swift resolution for your case if approved. Chapter 7 bankruptcy is known as liquidation bankruptcy because it involves the liquidation of a debtor’s assets to pay off their outstanding balances with creditors. This chapter is popular because both individuals and businesses can apply and most – if not all – unsecured debts are wiped out. Although assets must be liquidated, there are certain exemptions in Utah regarding what can and cannot be seized by creditors. You can rest easy knowing that if you are applying for Chapter 7 bankruptcy protection in Utah, your home, certain personal effects like heirlooms and clothes, as well as retirement plans will not be liquidated. And once your case begins, you can expect to emerge from bankruptcy protection within 3 to 6 months.
However, if you do not like the idea of liquidating your assets or if you did not qualify for Chapter 7, you may be able to obtain approval for Chapter 13 bankruptcy protection.
Filing for Chapter 13 Bankruptcy Protection in Utah
Chapter 13 is the second-most popular bankruptcy chapter filed by debtors in Utah. However, there are stark contrasts between this chapter and Chapter 7. First of all, only consumers may apply for debt relief under this petition, limiting the number of debtors that can qualify. Additionally, this chapter takes longer to emerge from because instead of liquidating assets to pay off debt, petitioners are place on a payment plan so they can reimburse creditors at least a portion of what they owe.
This is the ideal chapter for debtors in Utah who are facing home foreclosure, are behind on car payments, make too much money at their job, or who are simply not willing to part ways with their non-exempt property.
For more information on Utah bankruptcy and to determine which option is best for you, schedule a consultation with a leading bankruptcy lawyer in Utah today to protect your rights and obtain debt relief as quickly as possible.