The bankruptcy rate in Utah is reportedly the fourth highest in the United States. According to a recent report by The Salt Lake Tribune, the average filing rate per capita in Utah in the first 9 months is 5.99 petitions for every 1,000 people. This is higher than the average nationwide per capita filing which is 3.97 petitions for every 1,000 people. If you are having major trouble with your finances, consider talking to reputable bankruptcy lawyers in Utah before filing for bankruptcy.
Bankruptcy is considered by most people as a last ditch effort to fixing financial troubles. You should not, however, jump the gun without first exhausting all possible options. Maybe a bankruptcy lawyer can help you negotiate with your creditors. If bankruptcy is the only option, you should consult lawyers to ensure that it is the only option left. You also need a competent professional to guide you through the tricky process.
A reputable Utah bankruptcy law firm like Lewis Adams and Associates would know that bankruptcy under Chapter 7 of the Bankruptcy Code is one of the most common types of bankruptcy. Chapter 7 refers to the liquidation of assets to pay off creditors. Most people who file for Chapter 7 bankruptcy are spared from losing everything because certain assets are exempted.
In Utah, exempt from liquidation are personal belongings and others that are deemed necessary to maintain a household. These include clothing, beddings, washers, dryers, and refrigerators. A debtor is typically allowed an exemption of up to $20,000 home equity. Before you decide to file for Chapter 7, you have to determine through your lawyer if you are even qualified.
New laws introduced back in the early 2000s have made it more difficult to file for Chapter 7 bankruptcy. Congress introduced a mathematical formula to determine eligibility for Chapter 7 bankruptcy called the “means test.” This is a two-step process where you need to make a comparison of your monthly income with the average income of a similar Utah household. If your income is below the average or median income, you qualify for Chapter 7.
Debtors generally receive a discharge of their financial obligations at the end of these bankruptcy cases. This includes credit card debt, personal loans, medical debt, judgments, and repossessions. However, certain financial obligations like child support and alimony as well as student loans are considered non-dischargeable.