Bankruptcy Exemptions in Utah

When one of the many thousands of those filing for bankruptcy today considers their options, many will choose a Chapter 7 bankruptcy petition. Chapter 7 is perhaps the most straightforward and simple process, and while it may require that some property be liquidated, there are also both federal and state property exemptions that the filer may claim to protect certain types of property.

In fact, most consumer debt can be erased, excluding child support, many student loans, alimony, and tax debts, yet consumers may still need to continue car and mortgage payments to ensure they keep those properties. Utah requires that all residents use state exemptions to protect their property.

How to Keep Your Car

State and federal exemptions differ in this area:

• Federal exemption – $3,225
• Utah state exemption – $2,500

Since most vehicle loans are secured by those vehicles, debtors must continue to make loan payments on that property to avoid repossession.

How to Keep Your Home

• Federal homestead exemption - $20,200
• Utah state exemption – $20,000 for real property, mobile homes, or water rights on the debtor’s primary residence – up to $5,000 if not
  • Proceeds of property sales are exempt for 1 year
  • Homestead declarations must be filed before any home sale is attempted

As with vehicles, most property mortgages are secured by that property. Even though that debt may be erased from the debtor’s credit record, if they fail to continue payments,

Utah allows exemptions for other forms of personal property:

• Clothing (except furs and jewelry), refrigerator, freezer, stove, oven, washer, dryer, and sewing machine, sofas, chairs, and related furnishings for one household – up to $500
• Dining and kitchen tables and chairs for one household – up to $500
• Animals, books, and musical instruments – up to $500
• Heirlooms or other items of sentimental value – up to $500
• Proceeds for personal property that is damaged
• Health aids
• Food to last for 12 months
• Beds and bedding, carpets, artwork done by or depicting a family member
• Burial plot
• Personal injury recovery for debtor or a person they depend upon
• Wrongful death recovery for a person the debtor depends upon
• Tools of the trade
  • National Guard members’ military property
  • Tools, books, and implements of trade – up to $3,500

Filing Schedule C of a Bankruptcy Petition

These state exemptions must be listed in Schedule C, which must be attached to the bankruptcy petition when filed. That list must include these details:

• The property claimed
• The Utah statutes substantiating those claims
• The property exemption value for each claim
• Each claim’s current assessed value (not the market value)

When to Get Legal Help

If you are considering bankruptcy, there are knowledgeable bankruptcy lawyers available to help you determine if you can file, if you should, and which format to use. You don’t have to face this difficulty alone, but with the help of a legal expert, you may find yourself ready to build a better financial foundation for the future.