What property is exempt under Utah Bankruptcy laws?

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

Can I get a fee waiver for my chapter 7 bankruptcy?

The short answer: it depends on your monthly income and how many dependents you claim.

One of the most difficult things for people planning to file for bankruptcy is finding enough money to pay an attorney to represent them. On top of attorney’s fees, you will have to pay the court a filing fee which is currently $306. That may not seem like a lot of money to some but if you are considering filing for bankruptcy chances are you are carefully watching where every dollar goes.

Fortunately, if you are below 150% of the poverty line you may be eligible for filing fee waiver. You’ll still have to pay your attorney’s fees but at least you can shave off a few hundred dollars off the cost of your bankruptcy.

The amount is determined by the U.S. Department of Health and Human Services (DHHS). Whether you qualify depends on how many people are in your household. The more people in your household, the higher that 150% of the poverty line climbs. The number also depends on which state you live in, although DHHS uses the same numbers for the 48 contiguous and D.C. while Hawaii and Alaska get their own numbers.

At the time of this writing this table shows the maximum monthly income you may have in order to qualify for a fee waiver.

Persons in family unit Monthly Income
1 $1,458.75
2 $1,966.25
3 $2,473.75
4 $2,981.25
5 $3,488.75
6 $3,996.25
7 $4,503.75
8 $5,011.25
Each Additional Person $507.50

Links:

How do I download my taxes from the IRS?

6355404323_ac5691e105_oAs a bankruptcy attorney I feel like I am always chasing down documents. There are a number of documents that need to be gathered and filed as part of your bankruptcy whether it is chapter 7 or chapter 13. Most documents that are needed to be filed with a bankruptcy, like taxes and pay stubs, are given to me in paper form.

When I get these documents from my clients I have to scan them to my computer and make sure they are in PDF format because everything that is filed now, whether it is with the federal bankruptcy court or the trustee’s office (in Utah at least) is filed electronically.

Often times clients know that they have filed their taxes but they just can’t remember where they put them or they have lost their taxes. I have good news for all my clients and for everyone filing for bankruptcy and for their attorneys. The IRS has a service called “Get Transcript” that allows you to download your IRS transcripts directly to your computer! This means that if you have a computer, or even probably a smartphone, you can log onto this website, download your IRS transcripts, and forward your transcripts on to your attorney without using a single piece of paper. And the best part about it is that it’s absolutely free.

Links:
“Get Transcript”, download your tax transcripts from the IRS

Do I need to hire a bankruptcy attorney?

waterblaster-pressure-washer-gx390The short answer is ‘no’. Anyone can file his or her own bankruptcy. Perhaps the wiser question is ‘should I hire a bankruptcy attorney?’ The short answer is ‘yes’. Allow me to explain.

When I was in college I ran a mobile detailing business with a friend of mine. I borrowed my dad’s pressure washer, bought a truck, and bought the necessary equipment and I went out and found some clients. The business was successful while it lasted but in the end my friend and I ended up at different colleges and we gradually wound up the business.

A couple of years later my dad went to go use the pressure washer on our driveway. When he tried to use the washer, only a weak stream came out. Frustrated, he came to me since I had used the washer so much in the past.

Thinking I was up for the challenge, I decided to have a go at it. The engine seemed to be working just fine so I turned to the pump, a complex copper piece attached to the engine. I was a little nervous but I started taking the pump apart. Inside I found all kinds of pieces that somehow worked together. I tried my best to remember where everything went but there were just too many pieces and I started to forget how to reassemble the machine.

I sat there on the garage floor surrounded by various pieces. I couldn’t find the owner’s manual so I had to download a PDF from the Internet. I ran out of time that Saturday but I thought I had a pretty good idea of which piece needed to be replaced. I emailed the corporate headquarters of the company that made the actual pump and ordered a part from them.

A couple of Saturdays later I found sometime and I attempted to put the pump back together. Needless to say, it took much longer than I had expected. I ran into all kinds of weird mechanical hiccups. Finally, at the end of that Saturday, I was able to put everything back together and I decided to give the pressure washer a test run. I was really hoping the darn thing would work because I had just invested two Saturdays into fixing the washer and I had spent some of my dad’s money buying a new part. If it didn’t work, I was going to be ticked. The moment of truth was here. I fired up the engine and squeezed the trigger. A powerful stream came shooting out of the machine. I was relieved that I didn’t have to spend another Saturday troubleshooting that pressure washer.

Now you might be asking at this point, what does a pressure washer have to with the price of tea in China? More specifically, what does a pressure washer have to do with bankruptcy? I’ll tell you.

There are several repair shops near my house that know how to fix pressure washers. I could have easily taken the washer to one of those shops. It would have been easier. It would have saved me two Saturdays. True, it would have been more expensive. But most importantly, I would be more certain that the job would get done.

Sometimes people ask me if they need an attorney to file bankruptcy. Again, the answer is ‘no’. Generally you don’t need an attorney to represent yourself in legal matters. But I generally would not recommend going at it alone. When I was fixing that pressure washer, I decided to do it on my own because the risk was low. If I didn’t fix the washer, someone else could probably fix it. Even if I destroyed it, we could go buy another one for a couple hundred bucks.

You and your family’s economic well-being is a whole “nother” story. Can you really afford to lose your house or your car? Can you afford to have your wages garnished? Do you really want to roll the dice on these things? Of course you can always re-file should your case get dismissed but there are consequences to filing again. And if you have to file again, you have to pay the filing fee again. At this point, you aren’t really saving much money at all and you have to do all the work. The work takes you longer than it would an attorney because it is something you are new at and you don’t know if you are doing it right. The list goes on and on.

Do you have to hire a bankruptcy attorney? No. Should you hire a bankruptcy attorney? Yes.