Utah Bankruptcy
Utah Bankruptcy Law
Utah bankruptcy law follows federal law and closely relates to a majority of bankruptcy laws in other states. Utah’s rules and exemptions aren’t considered strict, nor are they considered very lenient. It’s becoming harder and harder to file for Chapter 7 in the state of Utah, and more and more people are being forced to file under Chapter 13 instead.
As in most states, the state of Utah requires a person to attend a credit counseling course 6 months before filing for Utah bankruptcy, and they must also show proof of attending a debtor education course before arriving at settlement. There are a number of other steps explained further down.
Utah Bankruptcy : Personal and Corporate
Although there are other types of bankruptcies, the majority of individuals and families file under Chapter 7 or Chapter 13 in the state of Utah. A corporation within the state usually files under Chapter 11.
UT Bankruptcy : Chapter 7
This type of foreclosure usually works best for individuals and families with large amounts of unsecured debt and limited means for income. This type of bankruptcy is called liquidation or straight, and a person is usually left with a clean slate after creditors collect all necessary assets.
Like other states, Utah mandates that a person pass a means test before they are eligible for Chapter 7. The person or family must have an outstanding amount of debt, and the family’s household income must fall below the $54,740 average. Utah is known for making families with a less than average income still file Chapter 13, though. The state’s unemployment rate is fairly low at 7.7%, and a judge will often suggest a family change their spending habits. However, if a family does qualify for Chapter 7, the following exemptions sometimes apply:
• $40,000 homestead for a family
• 75% of wages
• Vehicle up to $2,500
• Limited amounts of personal property
UT Bankruptcy : Chapter 11
If a corporation is facing instability, an owner may choose to file Chapter 11. This measure allows a corporation to rearrange its finances, employees, and procedures in order to increase profit and reduce debt. The owner often oversees the reorganization and reports back to a judge and creditor.
UT Bankruptcy : Chapter 13
If a family chooses to file Chapter 13 bankruptcy, they will be required to make monthly payments for three to five years in order to reduce their debt to numerous creditors. The main advantage for a person or family filing Chapter 13 is that they keep their house even in the wake of foreclosure.
Taxes
Under Chapter 7, a creditor may collect federal and state tax returns as a form of asset. These returns are generally guarded under Chapter 13.
Filing for Utah Bankruptcy
Apart from attending credit and debtor courses, there are numerous other steps to filing UT bankruptcy. The steps usually include:
• Filing an attorney certificate
• Proof of income
• Proof of net monthly income
• Anticipated changes in income
• Educational individual retirement account
• Copy of most recent tax return, and in some cases, tax returns from the last four years
It is always smart to hire a lawyer if you are thinking about filing for Utah bankruptcy. They will make sure you submit all the right documents on time and work their best to get you the best settlement possible.
