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 Point, Utah bankruptcy lawyer beforehand.
Chapter 7 Bankruptcy in West Point, Utah
There are 2 main forms of consumer bankruptcy in West Point, 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 Point, Utah.
Chapter 13 Bankruptcy in West Point, Utah
Chapter 13 bankruptcy in West Point, 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 Point, Utah
Whether Chapter 7 or Chapter 13 is the right choice for you depends heavily on your particular situation. If you have a steady income stream, and a lot of non-exempt property, Chapter 13 might be right for you. If you don't have a steady income, and most of your property is exempt, Chapter 7 might be a better way to go.
Regardless of your situation, you should speak with an attorney in West Point, Utah who is experienced in bankruptcy before making a decision. They will be able to advise you of your options, and the likely outcomes of each one, allowing you to make a much more informed decision.