Chapter 7 bankruptcy is probably the most common bankruptcy filing made in Utah. Bankruptcy in Utah involves filing an official bankruptcy petition with the court. You must first seek professional help to help you determine which chapter of bankruptcy to file under. Bankruptcy in Utah enables debtors to keep most, if not all, of their property. The trustee or lenders will liquidate all assets to pay debts including debts against secured creditors and loans.
The debtor’s personal representative such as a lawyer or a doctor shall prepare the necessary documents for the court proceedings. The purpose of filing is to give a fresh start to the debtors so that they can start fresh and do not have to worry about their debts anymore. If the case is being handled by the debtor’s representative then they are paid by the creditor until the case is settled. A chapter discharge means that the creditor has to foreclose on the debt and the debtors are absolved from their debts after they file a fresh start statement.
Filing for chapter 7 bankruptcy will involve some work on the part of the debtors and the legal representatives. They must file a statement of their financial situation including current and previous earnings and the total assets and debt liabilities. Along with this they also have to submit financial documents that will substantiate their claims about their financial status. This paperwork will include income requirements, debt repayment plans, debt consolidation options, and other relevant information. It is important that the debtors understand that the creditors have the right to take possession of their properties and sell them to cover their debts.
After the debtors get their statements they have to hire an attorney who will act on their behalf to the court and negotiate with the creditors on behalf of them. The process of hiring an attorney can take some time but it is well worth the time and effort because this will result in the successful filing of the chapter 7 bankruptcy. The attorney’s salary will be contingent on how much the debtor and their family need to pay off their debts.
The first step, the debtors have to take is to contact a Utah bankruptcy lawyer. The lawyer will help them file chapter 7 bankruptcy in Utah by explaining the whole process to them. He will also help them learn more about the various options the court has to offer the debtors to pay off their debts. Once the debtors have hired an attorney, they will still have to file a form with the court stating their intent to file a chapter 13 bankruptcy.
After the debtors fill out the form, they will have to submit it to the court. Once it is received, the court will hold a hearing and a date for a hearing to decide on whether or not the debtor can file chapter 7 bankruptcy. If the court is positive the debtor will qualify for the discharge of all or most of the outstanding debts. The debtor will then be discharged from all further obligations.
If the court is not positive, the debtor will have to file a motion to the judge requesting an automatic stay be placed on the creditors’ debts. An automatic stay is a temporary suspension of all collection activities while the case is being heard. Creditors will receive a formal notice from the court indicating that the debtor has filed a chapter 7 bankruptcy petition. The creditors will then receive written notification from the court indicating that collection activities will now stop. Some creditors may even be forced to return all the money that was invested in the collection efforts. However, once an automatic stay has been placed on the debts with the creditors are free to resume collection efforts.
The automatic stay will remain in place until the debtor files a plan to pay off the debts. When a plan is filed with the trustee will distribute the funds received from the sale of the non-exempt assets among the debtors. The distribution of the funds is made according to the instructions of the court. However, if the debtor does not intend to pay off the debts of the trustee will order the distribution of the remaining funds to the creditors. After receiving this information the creditors will distribute the remaining monies to the debtors according to their agreement.