Understanding and Determining Bankruptcy Exemptions
Each state has its own bankruptcy laws. In Utah, whether you apply for Chapter 7 or 13 bankruptcy, you can use certain exemptions so you can keep some of your properties or reduce the amount you pay to creditors. Knowing what these are let you determine the steps to take throughout the process.
When a client consults with a lawyer on bankruptcy in Salt Lake City or wherever they live, they will know the exemptions, which include but not limited to:
If you own a property, you can exempt certain types of real estate and properties filing for bankruptcy. These include, but not limited to:
Musical instruments, animals, books and other similar items for a total of up to $1,000
Heirlooms of up to $1,000 worth
Furniture totaling of up to $1,000
Proceeds from damaged, sold, or lost property already exempted
Food to last a year
These are some of the properties you can exempt from paying an outstanding debt when filing bankruptcy.
Utah provides insolvent people with the right to exempt equity in real estate — if it’s their primary residence with a value of up to $30,000. Included in this exemption is a house, mobile home, or water rights you already have. People can also include up to $5,000 in property that’s not their primary home.
Other than real estate and properties, you can include different types of insurance to their list of exemptions, these include:
Hospital, surgical, disability and illness benefits
The cash surrender value of a life insurance policy; however, exemptions do not include payments made within the year before on files for bankruptcy.
Proceeds from life insurance if a beneficiary is an insured person’s dependent or husband (or wife), and if you need the proceeds for support.
These are some of the exemptions you can include when filing for bankruptcy in Utah. These enable you to pay outstanding debts and still have enough money or properties to get through the next year or months, while they get back on their financial feet.