Our legal team at Huntsman | Lofgran, PLLC helps Salt Lake Valley residents negotiate the many decisions involved in a bankruptcy filing. It can be a complicated process, particularly when it comes to Chapter 7 bankruptcy, in which you essentially agree to surrender most of what you own for a fresh start. Our team approach puts our lawyers’ more than 45 years of combined legal experience on your side of the table, providing a greater perspective that can lead to more creative solutions.
Chapter 7 enables you to liquidate what you own, pay off creditors to the best of your ability and be rid of many unsecured debts. On the other hand, Chapter 13 bankruptcy provides a debt repayment plan. Chapter 13 is not an easy road for many debtors to travel. It requires a commitment to adhere to a payment plan that can last between three to five years. The good thing about Chapter 13 bankruptcy, however, is that the chances are better that you may be able to retain your home and car.
With Chapter 7 bankruptcy, you may lose your house and car, and your bankruptcy likely is going to make it more difficult for you to obtain future credit, rent an apartment or even find a job. Furthermore, you may still be obligated to pay some of the debt you brought into the bankruptcy.
At Huntsman | Lofgran, PLLC, we apply the state’s means test to see if you qualify for Chapter 7 relief and guide you through the entire Utah bankruptcy process — including your enrollment in required bankruptcy courses, the subsequent bankruptcy filing and your estate’s liquidation under Chapter 7.
Filing for bankruptcy triggers an automatic stay against creditors’ efforts to collect the debts you owe them. Any foreclosure actions underway are postponed. Bankruptcy also puts a stop to car repossessions.
While bankruptcy also can erase unsecured debts, such as medical bills, store credit card charges and some unsecured junior liens on your home, some types of debt are virtually immune to bankruptcy, including:
At Huntsman | Lofgran, PLLC, our dedicated bankruptcy attorneys help you determine which debts are likely to be wiped clean and which debts are brought forward.
Whether your house and car are going to be liquidated, depends upon the equity you have in each, the total amount you owe creditors and your Utah bankruptcy exemptions.
The Utah homestead exemption lets an individual exempt $20,000 in the primary residence property, married couples $40,000. For example, if you and your spouse own a $200,000 home, but still owe $110,000 on it that would give you $90,000 in equity. The bankruptcy exemption would let you hold back $40,000 of the $90,000 from bankruptcy. The remaining $50,000 in equity would be available for your bankruptcy trustee to use to pay your creditors.
These same principles apply to your automobile, for which the first $2,500 in equity is exempt ($5,000, if you’re filing jointly). Be advised that even if the bankruptcy trustee chooses not to liquidate your house or car, your creditors still may be able to reclaim either during or after your bankruptcy.
The plus side to a Chapter 7 bankruptcy in Utah includes:
The minus side may include:
Just because one spouse has amassed a significant amount of debt and decided to file for bankruptcy, does not mean the other spouse must also file. However if the debt is jointly held, both spouses should file. Otherwise, creditors simply go after the non-filing spouse for payment in full.
It’s best to go with an experienced attorney when you file for Chapter 7 bankruptcy, someone who knows not only the law’s complexities and reach, but also what can be negotiated. Call Huntsman | Lofgran, PLLC today at 801-474-0031, or contact us online to set up a free initial consultation to see how our legal team can help. Our office is conveniently just two miles off Route 15 in Salt Lake City.