Keep More Property in Bankruptcy
The Utah legislature amended the Utah bankruptcy exemptions in 2013. Bankruptcy exemptions are the laws that protect property from liquidation in bankruptcy. Since Utah has opted out of the federal bankruptcy exemptions, the Utah amendments means that bankruptcy filers can now keep more property when filing in Utah. The new exemptions take effect on May 14, 2013.
How Do The New Utah Bankruptcy Exemptions Impact Chapter 7 Bankruptcy in Utah?
In a chapter 7 bankruptcy, the debtor or debtors will inventory and appraise all of their assets. Their assets will then be divided into two categories: exempt and non-exempt by applying the applicable exemption rules. Exempt assets are assets that cannot be taken for liquidation; non-exempt assets may be liquidated by the bankruptcy trustee and the proceeds distributed to creditors. Utah’s new exemption statutes increase the amount of property that is exempt and adds a couple of new exemptions. The new exemptions increase the exemption amount of the following property categories to $1,000:
- Sofas, chairs and related furnishings
- Dining and kitchen tables and chairs
- Animals, books, and musical instruments
- Heirlooms or other items of particular sentimental value
The amendment also now includes an exemption for firearms and ammunition. The homestead exemption in Utah and the vehicle exemption were also increased.
How Do The New Exemptions Impact Chapter 13 Bankruptcy in Utah?
Since debtors typically retain possession of all their assets in a chapter 13 bankruptcy, the exemption changes are more readily apparent in chapter 7 cases. The exemption amendments also impact chapter 13 bankruptcies, however. In a chapter 13, the plan must, among other things, return to creditors the amount they would have received in a chapter 7 case. Thus the exemption change can in some cases decrease the amount that chapter 13 debtors must pay into the plan over the course of its term.
How Do I Ensure That I Keep As Much Property As Possible When Filing Bankruptcy in Utah?
This article has only provided a general overview of the new Utah bankruptcy exemptions. Application of bankruptcy exemptions requires in-depth understanding of the individual’s assets and the nuances of Utah’s bankruptcy statutes. To ensure that you keep as much property as possible when filing bankruptcy in Utah, contact an experienced Utah bankruptcy attorney.
Russell B. Weekes is an experienced Salt Lake bankruptcy attorney. This article only provides a broad generalization and is not intended to provide legal advice for any specific circumstance. To schedule a free Salt Lake bankruptcy evaluation, call 801-783-1888 or complete our web form today!