Chapter 13 Bankruptcy

 

Southern Utah Chapter 13 Bankruptcy Attorney

 

Chapter 13 bankruptcy, sometimes called a reorganization bankruptcy, differs from Chapter 7 in that a debtor will be allowed to keep most of his assets in exchange for creating and abiding by a three or five-year payment plan.  The bankruptcy Trustee oversees the plan and distributes a portion of the payments to each of the debtor’s creditors.  After the plan is successfully completed, any remaining debt will be discharged.

To qualify for a Chapter 13 bankruptcy, a debtor must have a current income, and his combined debt must not exceed a certain limit.  As the Chapter 7, the Chapter 13 begins by filing a petition with schedules detailing the debtor’s debts, income, assets, exemptions, and expenses.  A plan is then formulated to determine how much the debtor must pay each month.

Other than the payment plan, the Chapter 13 process is very similar to the Chapter 7 process once the debtor’s petition is filed. Review the Chapter 7 process by clicking here.

The Chapter 13 bankruptcy is just as complex as the Chapter 7, if not more so as it extends over several years before a discharge is granted.  The attorney’s at Ruesch & Reeve PLLC has helped debtors in all types of situations traverse the necessary paperwork and successfully negotiate a discharge.  If you believe you can benefit from bankruptcy protection, please contact our office for a free initial consultation to discuss your specific case.

Benefits of a Chapter 13 Reorganization

A Chapter 13 reorganization may offer a debtor certain benefits over a Chapter 7 liquidation. Under Chapter 13, you may be able to:

  • Save your home from foreclosure
  • Keep your company’s doors open while you restructure and repay debt
  • Reschedule and lower payments on secured debts
  • Protect third parties who are also liable for your debt
  • Avoid any and all contact with creditors

Each individual or business seeking bankruptcy protection will have different concerns and long-term goals, and that is why it is so important to consider all of your options before you file. Take the first step and arrange a confidential consultation with a seasoned Utah Chapter 13 bankruptcy attorney at Ruesch & Reeve PLLC. Call today and see what we can do for you.  

Read more about Bankruptcy

Bankruptcy Myths

With new laws it's not worth it to file for bankruptcy

False. The new law effective October 2005 allows you to quality for a Chapter 7 bankruptcy if your household income is less than your state’s median, or if you pass a “Means Test” to see if you have qualifying, low disposable income.

I have to have a large amount of debt before qualifying for bankruptcy

False. The question to ask is, “Is my debt load overwhelming compared to the amount of disposable income I currently have?”

I will lose everything I own including my car and home

False. Every state has exemptions which allow you to keep bare necessities. Insert link to info below in red. A place to live and a way to drive to work could be considered bare necessities.

It will take at least seven to ten years for my credit to recover from bankruptcy

False. Even with a bankruptcy showing for up to ten years, you can begin to build credit immediately after filing. The national average shows credit can be recovered in as little as eighteen months.

Everyone will think I'm a bad person if I file for bankruptcy

False. Someone must specifically be searching for your bankruptcy to find it in the public record. Always remember that bankruptcy provides relief. It is not a punishment demanded by your creditors. Law makers enacted laws to allow people to financially have a fresh start.

After I file for bankruptcy creditors can still garnish my wages

False. In Chapter 7 bankruptcies any wages you earn after the filing are yours to keep. Chapter 13 bankruptcy includes a pre-approved plan to pay off debt over a specific amount of time. In this case part of your earnings will be applied to your debts.

The following is a list of property that is generally exempt from seizure or collection under Utah law

  (see Utah Code §§78B-5-50378B-5-50578B-5-50678B-5-508):

 

  • Burial plot for you or anyone in your family; (see Utah Code § 78B-5-505(1)(a)(i));
  • Health aids that are reasonably necessary (see Utah Code § 78B-5-505(1)(a)(ii));
  • Public Benefits such as General Assistance, Social Security, Disability, Unemployment, Worker’s Compensation, (see Utah Code 78B-5-505(1)(a)(iii));
  • Benefits used for medical, surgical, or hospital care for you and your dependents (see Utah Code 78B-5-505(1)(a)(iv));
  • Veterans Benefits (see Utah Code 78B-5-505(1)(a)(v));
  • Child Support (see Utah Code 78B-5-505(1)(a)(vi));
  • Alimony and separate maintenance (see Utah Code 78B-5-505(1)(a)(vii));
  • Money or assets in a Qualified Domestic Relations Order (QDRO) (see Utah Code 78B-5-505(1)(a)(xv));
  • One clothes washer & dryer, refrigerator & freezer, stove & microwave, and sewing machine (see Utah Code 78B-5-505(1)(a)(viii)(A));
  • All Carpets in use at your house (see Utah Code 78B-5-505(1)(a)(viii)(B));
  • Food and other provisions sufficient for 12 months for you and your family (see Utah Code 78B-5-505(1)(a)(viii)(C));
  • Clothing that is reasonably necessary (not including jewelry or fur coats) (see Utah Code 78B-5-505(1)(a)(viii)(D));
  • Beds and bedding for you and your immediate family (see Utah Code 78B-5-505(1)(a)(viii)(E));
  • Artwork depicting or produced by you or immediate family (unless such artwork is held as part of a trade or business) (see Utah Code 78B-5-505(1)(a)(ix));
  • Insurance proceeds, judgment, or settlement that are compensatory for bodily injury or wrongful death to you or to someone for whom you are or were a dependent (see Utah Code 78B-5-505(1)(a)(x));
  • Cash value of Life insurance policy (see Utah Code 78B-5-505(1)(a)(xi),(xii),(xiii));
  • Pensions, IRA, 401(K) plans and retirement plans (see Utah Code 78B-5-505(1)(a)(xiv));
  • Sofas, chairs, and related furnishings reasonably necessary for one household, up to a total value of $500 (see Utah Code 78B-5-506(1)(a));
  • Dining and kitchen tables and chairs reasonably necessary for one household, up to $500 per debtor (see Utah Code 78B-5-506(1)(b));
  • Animals, books, and musical instruments, up to a total value of $500 (see Utah Code 78B-5-506(1)(c));
  • Heirlooms or other items of “particular sentimental value” up to a total value of $500 (see Utah Code 78B-5-506(1)(d));
  • Implements, professional books, or tools of your trade, all having a total value not exceeding $3,500 (see Utah Code 78B-5-506(2));
  • Motor vehicle (1) not exceeding $2,500 in value, used primarily for daily transportation, and not used for recreational purposes (see Utah Code 78B-5-506(3)(a)(b));
  • Cars with equity up to $2,500 (see Utah Code 78B-5-506(3)(b));
  • House or primary personal residence with equity up to $20,000 per debtor (see Utah Code 78B-5-503(2)(a)(ii));
  • Real property that is not primary personal residence with equity up to $5,000 per debtor (see Utah Code78B-5-503(2)(a)(i));

I totally recommend Ruesch and Reeve Legal Services. They treated me with the utmost dignity and respect during a very trying time in my life. You will not be disappointed.

Jennifer Rogers

Often a little nerve-wracking reaching out upon legal matters however, this staff was personable & seemed to truly care.

Sandra D

The Ruesch and Reeve Law Firm helped make the most stressful point of my life so far, much easier. Thank you so much to Nate Reeve and the team for making such a stressful process so much easier to deal with. Amazing job.

Billy ODay

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