What are Bankruptcy Exemptions?
Chapter 7 bankruptcy is often termed liquidation bankruptcy because the law provides for the debtor’s nonexempt assets to be liquidated. When an individual files for Chapter 7 bankruptcy, the bankruptcy code provides that certain assets belonging to the debtor become part of a bankruptcy estate. A trustee is appointed to sell these assets with proceeds to be distributed to the creditors in partial compensation for their loss. However, the writers of the code did not want those filing for bankruptcy to have every last asset taken. Legislators wanted individuals facing bankruptcy to have a reasonable chance at financial recovery. For this reason, the code allows for certain property exemptions. These exemptions protect specific assets from being taken from the debtor for resale.
Utah Bankruptcy Exemptions
The bankruptcy code is federal law, and federal law creates some exemptions. But, the federal law also allows for each state to further regulate exemptions.This creates significant differences from state to state. Thus, when filing for bankruptcy, residents of Utah must consult the specific laws of Utah to determine what property individuals can exempt when filing for bankruptcy. The Utah Code contains these exemptions which are found mainly in U.S.C. §§ 78B-5-501 et. seq.
The state of Utah allows individuals to exempt all or part of various forms of property from bankruptcy liquidation including equity in a home, insurance benefits, pension benefits, and miscellaneous personal property. Utah statutes provide specific detail and dollar amounts for each available exemption and require meticulous attention to account properly.
At Arnold, Wadsworth & Coggins Attorneys, you can meet with an experienced attorney who will discuss with you the list of property exemptions available to you here in the state of Utah. We will help you carefully prepare for your filing to ensure you get the maximum benefit you are entitled to through these exemptions.
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For your free initial consultation with an experience bankruptcy attorney at the law firm of Arnold Wadsworth & Coggins, call us today at (801) 475-0123.