Utah Chapter 13 Bankruptcy Information
Get Meaningful Debt Relief With a Chapter 13 Bankruptcy!
A Chapter 13 bankruptcy is an effective tool to obtain debt relief. Some of the events which may trigger its use include home foreclosures, repossessions, the accumulation of local, state, or federal taxes, and garnishments, just to name a few.
Unfortunately, many Americans who need debt relief are under the assumption that they must give up all of their possessions in order to file for bankruptcy. Although property can occasionally be sold to satisfy a debt, most people avoid this because of Utah’s exemptions policies. These policies basically allows you to keep your non-exempt property from being used to pay off money you owe to creditors.
Do I Have to Pay Back 100% of My Debts with a Chapter 13?
With a Chapter 13 bankruptcy, a trustee will be involved and act as a negotiator between you and your creditors. Part of the trustee’s responsibilities also includes structuring a payment plan for the debtor. A repayment plan will usually last between three to five years. After this time, and if you’ve been able to meet your payment obligations, any remaining dischargeable debts will be forgiven. So no, you will not be obligated to pay back 100% of your debts.
How Will My Payments to the Trustee Be Structured?
Your current and future disposal income will be a primary factor in determining the payment amount to the trustee. One component of the repayment calculation includes the Utah Means Test averages. Your income will be compared to other incomes within Utah. Unfortunately, there isn’t a simple calculation to determine the exact amount of your payment. You’ll need the assistance of a qualified bankruptcy attorney to determine your exact payment. A trustee will weigh the amount that you pay under a Chapter 13 to the amount that you would pay if you had filed a Chapter 7 bankruptcy. The repayment amount under the Chapter 13 will need to be equal to or exceed that of a potential chapter 7.
Why Would I Want to File a Chapter 13?
Chapter 13 bankruptcies are appealing because they help you to keep your secured assets, which include property like cars, boats, homes, etc. A chapter 13 is especially important if the value your property exceeds the amount of exemptions allowed by the Utah bankruptcy exemptions.
How Does a Chapter 13 Differ From a Chapter 7?
It’s important to distinguish that a Chapter 13 is a financial reorganization of debts, whereas a Chapter 7 is a liquidation of debts. For example, if you’re late on your home loan and you want to keep the property, you’ll need to file a Chapter 13 to catch up on your late payments. If you don’t want to keep your home then the trustee would foreclosure the home and use any proceeds to satisfy your unpaid loans.