Bankruptcy allows an individual or business to get rid of some or all of its debt. Typically, bankruptcy should only be considered when the debt is completely unmanageable, impossible to pay off, and there are no other options. However, in some cases, the benefits of bankruptcy can substantially outweigh the costs. Bankruptcy is governed by federal law and handled in federal courts, so the procedural and substantive rules involved in Utah are often the same as anywhere else in the U.S. However, individual bankruptcy courts have slightly different rules for items such as exemptions, so it would be a good idea to consult with a local West Bountiful, Utah bankruptcy lawyer beforehand.
Chapter 7 Bankruptcy in West Bountiful, Utah
There are 2 main forms of consumer bankruptcy in West Bountiful, Utah: Chapter 7 and 13. Chapter 7 liquidates some of the debtor's assets. It requires a certain percentage of the debtor's assets to be sold off to pay as much of his or her debt as possible. However, many types of property that most people own are exempt, meaning that they don't need to be sold. This often includes houses, vehicles, insurance policies, and basic personal items, like clothing. These assets are not available to creditors.
Once qualified assets are sold, and the money turned over to the creditors, most remaining debt is absolved. However, there are certain types of debt that cannot be absolved in bankruptcy, including student loans, taxes, child support, and criminal fines. If most of your debt is non-dischargeable, it may not be a good idea to file for bankruptcy in West Bountiful, Utah.
Chapter 13 Bankruptcy in West Bountiful, Utah
Chapter 13 bankruptcy in West Bountiful, Utah is markedly different. It may or may not be a better option than Chapter 7, depending on the facts of your individual case. Chapter 13 does not absolve debt, but restructures it instead. Normally, various debts are consolidated into a single monthly payment. This is designed to make the debt more manageable, giving the debtor the chance to pay off the debt over a longer period of time, without all of it coming due at once. This is normally manageable, as long as the debtor can make some sacrifices.
Which Type of Consumer Bankruptcy Should I File in West Bountiful, Utah
Which Bankruptcy type to file under depends heavily on the facts of each particular case. If you have a steady stream of income (enough to make a payment plan manageable), and a large amount of non-exempt property that you don't want to part with, Chapter 13 may be best for you. If you don't have a steady income or large amounts of non-exempt property, you may be better off filing for Chapter 7.
In any case, you should talk with a local West Bountiful, Utah bankruptcy attorney. Your attorney can advise you of your options and inform you of their likely outcome. This will make it much easier for your to make an informed choice.