How to file for bankruptcy in Utah can be a tough choice. You’ve weighed the pros and cons. And sadly, it seems like there’s no permanent solution to your debt. You have no choice but to file bankruptcy.
You’re not alone. In 2018, almost 800,000 Americans filed for personal bankruptcy. And while statistics continue to show an incremental drop in the number of cases filed, for many people that number is still far too high—a grim reminder of the reality they face when they have no other option.
But bankruptcy is neither grim nor fatal. It’s an opportunity; one that can allow you to start your financial life all over again, free from debt and harassing phone calls. It’s certainly not a walk in the park. But the benefits far outweigh the pessimism you may be feeling.
It might seem that declaring bankruptcy is an arduous and time-consuming process. Anything involving the reorganization of your finances will necessarily be time consuming. But it’s far from a complicated task—especially when you have a seasoned and qualified attorney to assist you.
And if you live in Utah, you may actually wind up saving money on bankruptcy legal fees as a result of particular state laws on exempt properties.
If you’ve ever wondered what is necessary to go through the process of filing bankruptcy with an attorney in Utah, here’s what you need to know.
How Much Does Filing For Bankruptcy Cost With An Attorney?
Unfortunately, there’s no specific estimate to the costs of filing for bankruptcy with an attorney. Since each case will be unique, the exact cost is predicated on the complexities of your situation. Generally speaking, however, it’s safe to assume that the more detailed the case, the greater the cost.
The Utah state filing fee for Chapter 7 bankruptcy is $335, while the cost for Chapter 13 is $310. Typically, attorneys will include filing costs in their fees. It’s been estimated that the national average cost of an attorney is between $1,200 to $1,500. But as we stated earlier, the cost depends on the particulars of your case. It’s not unheard of to pay fees in excess of $2,500 for relatively intensive cases. But it’s also just as frequent to hear of paying less than $1,000—even in Chapter 13 bankruptcies (which generally tend to be fairly complex in scope.) In Utah, it’s fairly common to hear of negotiable rates for bankruptcy attorneys in more complicated scenarios, so you may want to inquire about alternative fee arrangements.
What Will I Be Asked When I Meet With A Bankruptcy Attorney?
It’s important to remember that a bankruptcy attorney is there to assist you, not interrogate you. And while you may be sorely tempted to eliminate debt by declaring Chapter 7, your attorney’s advice should be given strong consideration.
Specific questions may be pertinent towards your marital status, employment status, income, outstanding debts, the existence of any liens or foreclosures, current credit and tax status, the combined value of your assets and most importantly, what you hope to achieve by declaring bankruptcy. Keep in mind that the goal of these questions isn’t to build a legal defense, but to best advise you what course of action you should take and what you may be facing during the proceedings. They may even suggest alternatives to declaring bankruptcy altogether.
At the very least, consider gathering the following 10 documents for review:
- Tax returns for the last two years filed
- At least six months of bank statements and paycheck stubs
- Current copies of your mortgage and vehicle loan statements
- Any paperwork related to a foreclosure
- Any investment and retirement statements
- If applicable, a copy of your life insurance policy
- Your automobile valuation
- A copy of your marital settlement agreement if you’re divorced
- Your driver’s license
- A copy of your social security card
This will help your attorney discern the best course of action should you choose to file for bankruptcy.
Keep in mind that six months prior to filing, you will have to undergo credit counseling as a result of the 2005 Federal Bankruptcy Act. For a list of approved counseling agencies in Utah, please click here.
Exempt And Nonexempt Property In Utah
As mentioned previously, legal fees can often be countered by understanding what property can be claimed as exempt during bankruptcy proceedings in Utah.
All but three states in the continental U.S. has passed the Homestead Exemption law, which is designed to protect at least some portion of the value of equity in a home from creditors. The maximum amount of equity which can be claimed as exempt will vary according to state law; there is no federal standard. And while some states have unlimited exemptions (Texas and Oklahoma being prominent examples), many only have a cap of roughly $20,000 or less. Which is hardly a comforting number when facing foreclosure proceedings.
Utah, on the other hand, is curious. While the Homestead Exemption maximum here is $30,000 for a primary residence, it’s also one of only six states that will allow married couples to claim double that amount on a home (the other five are Delaware, Maine, New Mexico, South Carolina and Wyoming.) Which means that in many cases over half the value of the equity in your home is protected from creditors—even in instances of Chapter 13 bankruptcy.
Other property that is considered exempt under Utah state law can include:
- Up to $5,000 from a secondary residence ($10,000 if filing jointly)
- Up to $5,000 for any motor vehicle
- Up to $1,283,025 of funds in tax exempt retirement accounts
Please keep in mind that federal property exemptions can differ significantly from Utah exemptions. And while Utah does allow you to choose between either federal or state exemptions, you can’t simply mix and match. It’s either one or the other. Also note that under Utah law, creditors can levy against exempt property subject to court conditions for any of the following:
- Alimony and child support
- Unpaid earnings of up to one month’s compensation
- State or local taxes
- Mechanic’s liens and assessments
Which is one reason why it’s suggested to retain an attorney in more complicated situations.
How Do I Know If A Utah Bankruptcy Attorney Is Right For Me?
While many individuals are choosing to self file for bankruptcy proceedings without the aid of an attorney (what’s legally known as “pro se” filing), it’s laborious, time-consuming and frequently ineffective. One incorrectly detailed form can result in an entire claim being rejected; and overlooked exemptions can be far too common.
But choosing the right bankruptcy attorney isn’t exactly as simple as choosing a primary care physician. Saying “I had a good feeling about them” isn’t enough. While an attorney who specializes specifically in bankruptcy practice should be your ideal choice, an ethical attorney will actually suggest alternatives to filing for bankruptcy. They’re fully aware that many consumers will be facing uncertainty, and they don’t want to exploit that simply for the sake of their business.
Their fees should also be commensurate with their service. While a multi-specialty practice may offer you the best rate, they also may not have the level of expertise a seasoned bankruptcy attorney can provide. It’s generally a good rule of thumb to avoid low rate bankruptcy mills with national presence which claim to process thousands of cases a year. Many times, you may find the details of your cases handed over to a legal assistant, with the only input from an attorney occurring during the proceedings—which doesn’t exactly boost your confidence when it comes to a successful appeal of your case.
As we said, it’s not the end of the world to claim bankruptcy. Hundreds of thousands of Americans do so annually, resulting in peace of mind and an opportunity to start their lives anew.
Whether you choose to file bankruptcy with an attorney, on your own or simply not claim altogether, it’s important to remember there’s no stigma in declaring bankruptcy. What’s important is to realize it as both a stepping stone and a relief. And sometimes in life, that’s all you need.