Lawyers Share Facts About Bankruptcy in Utah

Bankruptcy in UtahThings are looking up for Utahns. Based on statistics, fewer people are filing for bankruptcy compared to last year. This is a sure sign of slow but steady improvement in the economy.

However, some people are not out of the woods yet. More than 600 people found it impossible to keep up with their debt payments and filed for Chapter 7 bankruptcy in October 2015. If you’re considering that option as well, here are some facts a bankruptcy lawyer will tell you.

Chapter 7 Definition

Many types of bankruptcy exist, depending on the situation, classified as chapters under the Bankruptcy Code. Chapter 7 is for personal bankruptcies, and it can help give you a fresh start if you’re unable to pay your debts.

Another term for Chapter 7 is liquidation. This means you will lose everything you own, except for those that fall under Utah state exemptions. A court-appointed trustee will sell them to pay off at least part of your debts. However, once the process is complete, you’re no longer liable for most debts.


Know that not everyone is eligible for Chapter 7. You have to prove that your income is not enough to pay your debts. In Utah, that means your income must be below the current median income in the state for your household size. For example, the median income for a household of four is $64,780. You may still be eligible if you pass the means test, even if your income is higher than the median income.

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Debts that stay

Even if you’re successful in filing for Chapter 7, you will still have to pay for some debts. These are non-dischargeable under the law, although on rare occasions the court might decide to discharge some of them:

  • Alimony and child support payments
  • Attorney and court fees for disputes about child custody and support
  • Back taxes
  • Fines and penalties imposed by government agencies
  • Personal injury awards for drunk driving cases
  • Student debts

In some cases, especially when you don’t have a competent bankruptcy lawyer, you may be liable for dischargeable debts not included in your bankruptcy filing. Be informed when handling your bankruptcy filing.

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