One of the most important concepts to grasp when you are considering filing for bankruptcy is understanding how the bankruptcy exemptions work. When you file for bankruptcy you do not lose all your property. Under bankruptcy law there are exemptions that prevent creditors and the trustee from taking certain property from you.
Below is a basic list of property and the value that is exempt for each item of property under the Utah Code.
Real Property
Home: $30,000 equity single filing
Home (filing jointly): $60,000 equity
2nd Property: $5,000 equity
2nd Property (filing jointly): $10,000 equity
Vehicles
Car: $3,000 equity
Cars (filing jointly): $3,000 for first car, $3,000 for second car
Retirement
Retirement Funds are generally unlimited if the contract or policy has been owned by the debtor for a continuous unexpired period of one year. These include:
(a) Life Insurance policies
(b) IRA’s
(c) 401(k)’s
(d) Pensions
Basic Necessities
(a) Provisions sufficient for 12 months actually provided for individual or family use (includes food)
(b) All wearing apparel of every individual and dependent (not including jewelry or furs)
(c) Beds and bedding for every individual or dependent
Household Items (one of each of these)
(a) Clothes washer and dryer
(b) Refrigerator
(c) Freezer
(d) Stove
(e) Microwave oven
(f) Sewing machine
Limited Household Exemptions
$1,000 aggregate of these:
(a) sofas, chairs, and related furnishings reasonably necessary for one household
(b) dining and kitchen tables and chairs reasonably necessary for one household
(c) animals, books, and musical instruments, if reasonably held for the personal use of the individual or the individual’s dependents
(d) heirlooms or other items of particular sentimental value to the individual
(e) firearms and ammunition in the amount of $250 per individual, and not more than $500 per household.
Tools of the Trade
$5,000 of these:
Professional books or tools of the individual’s trade, including motor vehicles to which no other exemption has been applied, and that are actually used by the individual in the individual’s principal business, trade, or profession.
Links
Utah Bankruptcy exemptions can be found under three sections in the Utah Code:
78B-5-503
78B-5-505
78B-5-506
Sean Wood 