Filing Chapter 7 Bankruptcy In Utah | Bankruptcy Blog
Filing Chapter 7 Bankruptcy In Utah
Most people who file bankruptcy will file Chapter 7 Bankruptcy. Chapter 7 Bankruptcy is the least expensive, easiest and fastest method to discharge most of your unsecured debt. Unsecured debt may include: hospital bills, credit card debt and unsecured personal loans.
The first step in bankruptcy is to contact your Utah Bankruptcy Attorney. Your bankruptcy attorney will review your income and determine if you can file Chapter 7 Bankruptcy. Your bankruptcy lawyer will file your bankruptcy petition and schedules and all other bankruptcy forms.
Chapter 7 Bankruptcy is considered a liquidation bankruptcy. A trustee is assigned by the bankruptcy court to sell your assets and use the proceeds from the sale to repay your creditors. If you do not have assets, your bankruptcy case is a “no asset” case. All creditors have a priority rating and will be paid according to the order established under federal bankruptcy law.
After the bankruptcy petition is filed, an automatic stay will temporarily stop the collection efforts. Collections may continue if the bankruptcy judge determines there is “cause”. You may qualify to file Chapter 7 Bankruptcy if you are an individual, corporation, partnership or married couple.
In 2005, the Bankruptcy Abuse Prevention and Consumer Act (BAPCPA) was passed. It made several changes to federal bankruptcy law. Now individuals are required to take a credit counseling course prior to filing bankruptcy, a financial management course prior to the discharge of their financial and individuals must now pass an income test to qualify to file Chapter 7 Bankruptcy. The main purpose of the BAPCPA was to require more individuals to repay their debt by filing Chapter 13 Bankruptcy.
To file Chapter 7 Bankruptcy, an individual must pass an income test. The test will review their median income from the last six months and compare it to the income of other Utah residents of similar size. If a family’s income is less than other Utah residents they may file Chapter 7 Bankruptcy. If a family’s income is more than the median income for other Utah residents, you must complete additional mean tests.
Means testing will take your net income and subtract certain expenses such as your car payment, house payment, taxes owed, child support and school tuition (up to $1650) to determine if you will have enough disposable income to pay at least $6,000 ($100/month) toward your unsecured debts over the next 60 months. If you can do this, you will probably have to file Chapter 13 Bankruptcy. If you can not do this, but you could pay 25% of your disposable income toward debt repayment over the next 60 months, you may have to file Chapter 13 Bankruptcy.
The state median for the state of Utah is published by the United States Trustee Program. For the State of Utah, after March 15, 2009, the median income for a single wage earner was $48,832 and for a family of two it was $56,816. For a family of three it was $63,796 and for a family of four it was $71,919.
All the information provided above it general in nature and should not be considered as legal advice. Means testing can be complicated and it is important to talk to a Utah Bankruptcy Attorney to determine what type of bankruptcy you can file.
Comments are closed.