What is bankruptcy?
Bankruptcy is a process under federal law designed to help people and businesses receive protection from their creditors to whom they owe money. After a petition for bankruptcy and fee is filed in court, the court issues an automatic stay–a court order that temporarily protects the debtor from all further acts of collections until the court accepts a plan for repayment or full discharge of debts.
Why do people usually file for bankruptcy?
There are numerous reasons and circumstances that people may choose to file bankruptcy. Some are possible to avoid. Some are not. Possible reasons some choose to file bankruptcy may be even due to a combination of several factors such as:
Are there different types of bankruptcy?
While there are four (4) types of bankruptcy listed below, Chapter 7 & Chapter 13 are the most common bankruptcies used by consumers. A qualified Utah bankruptcy attorney can help guide you through to see which type is best for your situation.
Chapter 7 is called an immediate liquidation or straight bankruptcy in which is designed for an immediate liquidation of assets, and the judge can rule that the person is declared to be free and clear of listed debts. One cannot use chapter 7 again for six (6) years. And it is listed on a credit report for ten (10) years.
Chapter 13 is also called the wage earner reorganization. This is mostly used by individuals to protect them from collections while they reorganize and repay their debts, usually between 3 to 5 years. This option allows the individual time and satisfaction of repaying a portion, if not all, of what they owe. There is no limitation as to how soon one can file for Chapter 13 protection again. This remains on a credit report for seven (7) years.
Chapter 11 is a reorganization bankruptcy most commonly for businesses, to create and repayment plan for all debts. Usually the business continues to operate.
Chapter 12 is a reorganization bankruptcy for family farmers to repay all or part of the farm’s debt and continue to operate.
What debts can you discharge in bankruptcy?
There are certain debts that are readily dischargeable in bankruptcy. They include:
When not to file for bankruptcy
It is always in the best interest of the individual to work through his or her money own problems and pay bills than to declare bankruptcy, especially if the amount is near $20,000, which is often around one year’s salary for most people.
Seeking information and options from legal counsel is always a good idea in order to find the best solution for your individual situation.
For individuals in serious financial distress, bankruptcy is a viable option. While it does not wipe a credit record clean, it does offer a new start. One should seek competent legal counsel to consider all options before making a decision.
What happens to my personal property, real property and other assets?
Once the bankruptcy is filed, all the property of the debtor at the time of the filing and certain future property, becomes the property of the bankruptcy estate. This means that the bankruptcy trustee will take control of this property for purposes of paying the creditors.
HOWEVER, there is certain property which the debtor will be able to keep, which means it is either excluded or exempt. Which assets or property that will be exempt is determined upon your situation, your income and the state law. The best way to determine which property to keep requires a detailed analysis of your situation by a professional attorney.
Can I keep my house after bankruptcy?
Depending upon your circumstances, you may exempt (or able to keep) up to $100,000 in equity. When calculating your equity, use a lower amount which would reflect the price of a forced liquidation as opposed to the ideal selling conditions to find the value for your home. Once you know the value, subtract the amount owed on the loan, plus selling and transfer costs from the value. This will be the equity. You may be able to keep up to $100,000 in equity. Unfortunately, liquidated properties are often valued less than what we like to think the property is worth.
Can I keep my car after bankruptcy?
In most situations, courts understand that you need a car to work to get back on your feet. However, if you own vintage or expensive cars worth many thousands of dollars, it is more than likely you will probably not to be able to keep them. If, on the other hand, you have a car worth $10,000 and you owe $8000 on it, you will most likely keep it, but you must still make the payments on your car loan. This is called reaffirming (or keeping) the debt. In some cases, your attorney or representative can also re-negotiate the loan or the lease to get a more favorable deal for you.
Will bankruptcy affect my job or must I inform my employer?
No. Bankruptcy laws prohibit discrimination based upon a debtor filing for protection under the bankruptcy laws. Under normal circumstances, unless your employer is a creditor, your employer will not know.
What you should not do if you are thinking about bankruptcy:
Because there are several areas related to this question, you should consult your attorney. In particular there are three items worth mentioning.
What is my first step?
You want to make sure you are well informed. A professional Taylorsville Utah attorney can easily educate you on the steps that need to be taken and can help you make the best decisions that can positively impact you and your family.
The benefits of a Utah bankruptcy attorney:
Why do I need an attorney?
By seeking an attorney who is professionally educated in bankruptcy law, you can secure your future. It is safe and smart to try and protect your assets and your life be making sure you have a person who can be there for you when you are in need.
Because most bankruptcy processes and most cases are complicated, you might consider getting professional help.
While there are options to try first (such as working with your own creditors or seeking a non-profit financial education counselor) you should not wait until the last minute to think about seeking professional legal help for bankruptcy because some important bankruptcy rights may be lost by delay.
Bankruptcy is a legal proceeding with complicated rules and paperwork. You will want to get professional legal help, especially if you hope to use bankruptcy to prevent foreclosure or repossession of property and/or vehicles.
There are many legalities included in any type of bankruptcy law case. An attorney ensures you know what you are dealing with and how to better benefit your position. Have a lawyer by your side that can help guide you through the legal processes. You do not want to be faced with decisions that you are not well informed about. You do not want to blindly go forward in a bankruptcy and make a wrong move which will delay your rights. Contact a Utah bankruptcy attorney today.
What is the process of a bankruptcy and how will a Utah Bankruptcy attorney help me?
There is a seven-step process during a bankruptcy procedure, and a knowledgeable attorney can not only help guide you through the process, but also prevent unforeseen delays in the discharge of debts.
Step 1: Call a bankruptcy attorney.
Step 2: Means Testing – The attorney will conduct a means, or ability, to pay analysis required by law to determine if you are eligible and which type of bankruptcy is right for you.
Step 3: Credit Counseling – a session designed to ensure you are aware of all your options and resources available to you before filing bankruptcy.
Step 4: The filing – Your Utah attorney will file your bankruptcy with the bankruptcy court and all collection efforts by creditors will be temporarily stopped.
Step 5: Financial Education Program completion certificate required by law.
Step 6: Meeting of creditors – Within 45 days of filing you and your attorney will meet with creditors where you will testify under oath before a trustee that the information in your petition is accurate.
Step 7: Discharge of debts – usually 60 days after meeting of creditors.
John Christiansen is a premier Taylorsville bankruptcy attorney who is recognized for three consecutive years as a Rising Start in the bankruptcy category of Super Lawyers for the Utah and surrounding areas. For over 10 years he has consulted and represented thousands of clients in successfully eliminating and reorganizing debt. Combine that with Alta Legal’s super-competitive, low-cost pricing on attorney fees and you will have a team that simply cannot be beat.
We are proudly a federal debt relief agency that helps people file under the bankruptcy code. If you are considering filing for bankruptcy in Utah, contact the Taylorsville UT bankruptcy lawyers at Alta Legal for experienced respresentation.