Many people who make a good income but cannot afford their debts consider a Chapter 13 bankruptcy in Utah. It may eliminate your unsecured debt and keep your property and assets and give you a fresh start.
That said, filing Chapter 13 is a big decision. You are committing to a bankruptcy repayment plan that could last for up to five years.
This is why understanding the bankruptcy differences and understand your Chapter 13 plan payment is crucial to making the most informed decision. Let’s get started.
1) Understanding Bankruptcy Chapters in Utah
Chapter 13 Bankruptcy: Chapter 13 bankruptcy can also be termed as the ‘wage earners bankruptcy.’ In this case, debtors agree to repay their debts through installments that range from three to five years, paid monthly. Some debtors prefer to involve their lawyers in the process. Why do some people opt for Chapter 13? In some instances, they might be earning way too much to qualify for Chapter 7, or they might own assets that are too valuable.
Chapter 7 Bankruptcy: A chapter 7 bankruptcy is also called liquidation bankruptcy, and it is when a debtor cannot be able to honor their debt payments. So, they file for Chapter 7 to try and get released from the debt. While Chapter 7 can be completed in as short as four months and is not very expensive, you have to be eligible before you can file. Below, we have a calculator that you can use to approximate your Chapter 13 payment plan and if you are a suitable candidate for a Chapter 7 bankruptcy.
2) Chapter 13 Bankruptcy Plan Payment in Utah
The Chapter 13 bankruptcy Utah plan payment estimate factors in the IRS National expense figures in addition to specific Utah expenses. The calculations are complex and are unique to your financial situation, so we built the Utah Chapter 13 plan payment calculator below.
Factors used when calculating a Chapter 13 plan include, but are not limited to:
- Disposable Income — The amount of income you have each month after subtracting allowable payroll deductions and allowable living expenses from your gross monthly income.
- Assets — In some cases, the value of your assets could increase the amount of your Chapter 13 plan if your assets have large amounts of non-exempt equity. We discuss Utah bankruptcy exemptions in more detail below and how exemptions impact your Chapter 13 plan.
- Debts — Some debts must be paid in full through the Chapter 13 plan (priority unsecured debts such as taxes, alimony, child support, and administrative costs). Other creditors may receive partial payments, including unsecured debts, such as medical bills, credit card debt, and personal loans. Chapter 13 plans typically include back mortgage payments and car loan payments.
- Recent Financial Transactions — Some recent financial transactions could impact your Chapter 13 plan.
You can also explore detailed information about Chapter 13 by reading our article entitled “Chapter 13 Bankruptcy – Everything You Need to Know.”
Utah Means Testing
The calculator shown above factors in Utah means testing data found here to evaluate whether you are eligible for a Chapter 7. Also, there is information for the Utah Means Test starting May 15 2021 in the table below.
|# of People||Annual Income|
3) Chapter 13 Bankruptcy Utah Exemptions
Before choosing Chapter 13, consider whether you own assets that are above the exemptions. Even though you qualify for a Chapter 7, having a massive equity position in assets makes a Chapter 13 or debt settlement the more feasible option.
The state of Utah has several statutes and bankruptcy exemptions to be considered before you file for bankruptcy. In case you own assets that are above the Utah exemptions, then it is likely that they will be liquidated. You may consider reviewing all of the Utah bankruptcy exemptions before deciding whether to file a Chapter 13 bankruptcy.
4) Utah Bankruptcy Districts and Court Locations
There is just one bankruptcy district in Utah. However, there are two court locations. You can find more information about the courts below:
5) Chapter 13 Bankruptcy Utah Trustees
Liquidating the nonexempt assets of the debtor and administering the bankruptcy case are among the key responsibilities of the trustee. There are lots of Chapter 7 trustees but not as many Chapter 13 trustees. You can find the Chapter 13 bankruptcy Utah trustee below:
|Lon A. Jenkins||(801) 596-2884|
Is a Chapter 13 Bankruptcy the Right Choice?
A Chapter 13 bankruptcy is a valid choice for those overwhelmed by debt and are ineligible for a Chapter 7 or don’t want to file Chapter 7. You may want to estimate your Chapter 13 plan payment before deciding to see if it’s affordable and compare alternative options.
Also, there are other alternatives; including debt management and debt settlement; therefore, it is recommended that you choose wisely while weighing in all the merits and demerits. To aid in your process, you may want to view the video below summarizing a Chapter 13 bankruptcy in Utah.
Our Chapter 13 calculator helps in comparing the options on the table and offers the pros and cons; therefore, the calculator can be used for research or a resource. Debt can be a source of great anxiety and a feeling of being overwhelmed. We trust that this article will play a significant role in your journey of being debt-free.