Frequently Asked Bankruptcy Questions in Utah
Answers from experienced attorneys in Salt Lake City
Bankruptcy is a stressful and confusing time. There are many different options, and you may be feeling pressure from creditors or debt consolidation agencies to just pay them now. At Smart, Schofield, Shorter & Lunceford, we know it’s important to take stock of your situation and make the right decision for the long term. Here are some answers to common questions about bankruptcy:
- What is bankruptcy?
- What are the benefits of filing for bankruptcy?
- Who can file for bankruptcy?
- What can be discharged?
- What are the alternatives to bankruptcy?
- Will I lose my house or car?
- Can I change from one chapter of bankruptcy to another?
Call a Salt Lake City bankruptcy firm that cares about your family
At Smart, Schofield, Shorter & Lunceford, we know that financial insecurity is highly stressful. That is why we work with you to find the best solution for your family and offer special fee arrangements for bankruptcy clients. Don’t try to do this alone. You need an experienced partner who knows the way to financial freedom. Call 801-747-0647 today or contact us for a free consultation about your bankruptcy case.
Bankruptcy is a legal proceeding that frees a debtor from debts. In Chapter 7, nonexempt property and items are sold to pay off as much debt as possible. In Chapter 13, the debtor is given three to five years to pay off debts, sometimes at lower levels than were originally incurred.
Filing for bankruptcy can give you a fresh start, financially speaking. It can take some of the stress away. When you file for bankruptcy, bill collectors stop calling, foreclosure actions are temporarily halted, debts that cannot be paid are discharged, your wages cannot be garnished, and you are allowed to work out a payment plan with the IRS. After seven years, the bankruptcy no longer appears on your credit history.
Anyone with credit card debt, medical bills or business-related expenses can file for bankruptcy. If you have valuable assets that you don’t want to lose and a steady income source that would enable you to stick to a payment plan, you can file for Chapter 13. If you have no valuable assets, no ability to make payments and just want to keep your home and your car, you can file for Chapter 7.
Most debts are dischargeable but there are some common non-dischargeable debts. The most common non-dischargeable debts are student loans, child support, alimony, or other domestic obligations, and taxes or other governmental fines/penalties. We are happy to discuss any particular debt for which you may be concerned about its dischargeability.
Credit counseling agencies can help you establish a budget, work on money management skills and deal with creditors to negotiate payments. You can also try to negotiate directly with your creditors. If you have no assets, you are judgment-proof. However, these alternatives do not apply to debt such as child support, taxes or student loans.
Generally speaking, no. Most people in this situation have little to no equity in either. However, even if you have equity, it is exempt from the bankruptcy case up to certain limits $30,000 per person for a house and $3,000 per vehicle for a car. We can help you understand your specific situation.
It depends. If you received a Chapter 7 discharge within the past eight years, you cannot claim Chapter 7 again. But if you did not receive a Chapter 7 discharge and originally filed Chapter 13 — and you cannot stick to your payment plan — you or the court may convert the bankruptcy to Chapter 7. You may choose to convert if you originally filed Chapter 13 because of nonexempt assets that you wanted to keep, such as a second home or car, and decided that you don’t mind giving up those assets.