Utah Wage Exemption in Bankruptcy

In December, 2012 the Utah Supreme Court overruled a wage exemption used by bankruptcy attorneys for decades.  For years and years those that were due bonus money or wages that previously were not paid before filing of the bankruptcy could claim a 75% exemption.  For example, if the debtor was owed a bonus or merely received a gratuitous bonus of $10,000 (after taxes) the debtor could keep $7,500 of the $10,000.  Now, the entire amount is considered property of the bankruptcy estate and must be turned over to the trustee.

This recent ruling has only added to the fact that Utah is one of the least friendliest states in the country for those in need of a fresh start bankruptcy.

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