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Utah Bankruptcy Laws



Utah Bankruptcy Laws should be known by every resident of the state of Utah. Since the emergence of credit cards, consumer credit increased bringing with the convenience of purchasing anything you want, anytime. Together with this comes the responsibility to keep track of your expenses and pay your monthly bills on time. Should you encounter financial problems because of negligence on your part or simply an untoward incident that happened, consider all options you have.

If you have tried all other options like negotiating with the creditors to extend your credit and it just won’t work, bankruptcy may be the solution. Utah bankruptcy laws outline the procedures and requirements on how to successfully apply for bankruptcy protection.

Learning how to manage your money and develop a budget you can work around are essential things a debtor should learn in starting anew financially. For this reason, the United States Bankruptcy Code, as well as the state laws of Utah requires every debtor to participate in a credit counseling and education program within a 180-day period before filing for bankruptcy. The state of Utah has provided a list of credit counseling agencies that are approved by the Utah Bankruptcy Court. This counseling will be checked during a debtor’s application.

In deciding for the exact bankruptcy program that will suit the financial crisis a debtor is going through, a lawyer’s advice will come in handy. There are two options available. The debt liquidation program or Chapter 7 in the Bankruptcy Code gives debtors a second chance at fixing their debts. The trustee assigned in the bankruptcy case will help eliminate the dischargeable debts, and if necessary, the non-exempt assets of the debtor are controlled by this trustee, sold off, and the proceeds distributed to the creditors. Any remaining debt after the liquidation will be erased as deemed appropriate by the trustee. However, the eligibility for Chapter 7 bankruptcy is quite strict. The criteria won’t be based on the debtor’s amount of debts anymore, but on the annual income.

If the debtor is disqualified from Chapter 7, he may choose to pursue Chapter 13 instead. Chapter 13 or the debt reorganization program involves a repayment plan proposed by the debtor and presented in court for the bankruptcy judge’s approval. This plan will outline the details of the debtor’s to pay all the debt he owes. The creditors may contest the repayment plan, but the judge’s decision will is the final word. The trustee then takes over the case. His role in the reorganization plan is to check that it is carried out. The debtor’s monthly payments are given to the trustee who will, in turn, distribute the money between the creditors.

The US Bankruptcy Code has provided federal exemptions for use all throughout the country. Utah bankruptcy laws have also provided for their list of exemptions, which is protected from the creditor’s foreclosures and repossessions. Here is a partial list:

• Primary residence worth $20,000 for an individual and $40,000 for a family;
• A vehicle worth $2,500;
• 75% of wages;
• $500 each for furniture, animals, family heirlooms, and more;
• Personal belongings; and
• Benefits like health aids, illness benefits, child support, and health care insurance.

Always consult your lawyer before doing anything or before taking any action. Bankruptcy applications should not be a spur-of-the-moment decision, but should be well thought of.