Bankruptcy

You have options.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is designed to give you a fresh start. During the process, you will make a list of everything you own, and another list of everyone you owe. If you own anything valuable, the Court checks to see whether that property is exempt (meaning the Court can’t touch it). If it is not exempt, then the Court can sell it and give the money to your creditors. In exchange, the Court discharges or forgives all of your dischargeable debts completely.

What property can I keep?

In Utah, items that qualify as exempt include; most of your ordinary household furnishings, all of your clothing, your ordinary personal items, one motor vehicle or equity in one motor vehicle with a maximum value of $2,500, up to $20,000 per spouse equity in your residential home, and many other items. Nearly all Chapter 7 debtors receive a discharge without losing any property at all.

What debts go away?

All of them, except recent back taxes, student loans, debts incurred by fraud, debts incurred in a divorce decree, child support and alimony. There are a few other categories, but they only apply to very few individuals.

Do I have to go to Court?

Every debtor in bankruptcy must appear at a meeting of creditors, which is a short, 5-10 minute meeting where you testify under oath that you listed all of your debts and all of your property. Very few cases ever go to Court beyond that meeting.

What about tax refunds?

If you receive a tax refund during a Chapter 7 bankruptcy, or if you are entitled to receive a tax refund at the time you file your bankruptcy, there is a chance the Court may allocate the money. You should talk to our legal team regarding the sensitivity of timing if you need to use your tax refund proceeds.

What about bank accounts, cash, and retirement accounts?

Due to the fact bank accounts are not exempt, make sure you time the filing of your case between paychecks so that you don’t have a lot of money because none of the cash or bank accounts you have are exempt. 401(k) accounts are fully exempt. IRA accounts are exempt except for contributions made during the 12 months prior to filing your bankruptcy case.

How much does it cost?

Most cases are around $1000 in attorney’s fees, and the Court fee is $335. There is also a $33 per-person charge for credit reports. High income and self-employment cases are a little more. We offer flexibility in payments if you are not able to pay the full amount. In the meantime, I can stop some of the phone calls and harassment but the case can not be filed until the fees are paid in full.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is designed to allow you to keep all of your property and to consolidate some portion of your debt into one payment you can afford. It allows you to cure delinquent mortgage payments over time while you keep your home. In many cases Chapter 13 allows you to “cram down” secured obligations like car loans and furniture accounts, meaning that you would only have to pay the value of the property you financed, instead of the entire loan. Chapter 13 also allows you to pay back taxes and child support in reasonable monthly payments while stopping garnishments and levies. Chapter 13 basically allows you to pay what you can afford to pay while discharging what you cannot afford to pay. This is accomplished through a monthly payment plan that consolidates all of your debt (except ongoing mortgage payments) into one payment.

What about tax refunds?

In Utah, you may keep between $1000 and $2000 per year in tax refunds, while you must pay into the bankruptcy case any amounts over that $1000-$2000 amount, for the first 3 years of your plan. Most Chapter 13 debtors adjust their withholding so that they get their pay in their checks, instead of in big refunds at the end of the year.

What if a job is lost, or another emergency happens, and the payment is missed?

If you miss payments in Chapter 13, you can meet with your attorney and ask the Court to forgive the payment or adjust the length of your plan. The Court is flexible as long as the request is reasonable and for good cause.

Can it stop foreclosure?

Yes! Even up to the day before a foreclosure sale, Chapter 13 may be filed, the back mortgage payments may be put in the bankruptcy, and the sale is stopped.

Can I get a vehicle back after a repossession?

Yes, as long as the vehicle hasn’t been sold yet. If you file Chapter 13, the bank must return the vehicle, and you pay for the vehicle in your monthly payment plan.

How much does it cost?

In most cases, the attorneys’ fees are between $3,500 and $4,000. However, most of that is paid in your monthly payment plan. Up front, you would need $133 in the most desperate of cases, to $500-$600 in attorneys’ fees for the average case, and $310 for a Court filing fee. Credit reports are available for a charge $33 per person.

Our impressive legal team is prepared to handle whatever challenges come our way. Whether it’s your bankruptcy or family law claim, or estate planning preparations, we are able to help. For more information on our full array of services, call BDJ Express Law at 801-394-2336 or fill out our contact form to schedule your free consultation.