Utah Bankruptcy Exemptions
When filing bankruptcy in Utah, certain assets are protected from the trustee. The trustee is the court appointed party responsible for determining if certain assets are worth liquidating, and selling said assets if there is a profit to be made. A trustee’s job is to get as much as he/she can out of your bankruptcy estate, your bankruptcy attorney’s job is to protect as many of your assets as possible. There are certain legal exemptions that protect assets that are “necessary.” Most household items are protected to some extent, such as furniture and kitchen appliances.
A debtor is allowed to keep a vehicle, as long as the vehicle is worth less than $3,000 or has less than $3,000 of equity. If a married couple is filing, then they can keep two vehicles based on that criteria. So if you owe $10,000 on a vehicle and it is worth $15,000, then technically the vehicle can be liquidated, with your exemption ($3,000) being returned to you, presumably so you can purchase another vehicle, and the remaining $2,000 profit would go towards your debts.
There is also a $20,000 homestead, or $40,000 if you are married. This works the same as the vehicle exemption. If you are married an your house has less than $40,000 of equity, then it is exempt from liquidation. If your house has $80,000 of equity then the trustee can take and sell the home, return $40,000 to you and the rest would be applied toward your debt.
If you want to keep your home and it has too much equity, you can “buy” back the equity that is above your exemption from the trustee, if you cannot afford to do so then a chapter 13 bankruptcy might be a better option for you. To learn more about what assets are exempt, refer to the Utah Exemption Act, found at Utah Code § 78B-5-5.
Utah Bankruptcy can be tricky, and generally it is worth obtaining legal representation. Contact Pearson Law Firm for a free consultation with an experienced Utah bankruptcy attorney. Your attorney can discuss options with you and determine which chapter would be more beneficial to you, and discuss alternative options. Call today! 801-888-0991