Is Bankruptcy for me?

Knowing if bankruptcy is right for you is a complex issue.  There are many things to take into consideration, and the decision should only be made once you are fully informed.  Bankruptcy may be the answer for you if you have reached the point where your financial problems cannot be solved by personal efforts.  Bankruptcy, however, may not be the solution for you if your money problems will only reappear within 6-12 months.

What is the difference between chapter 7, 11, and 13?

Chapter 7:  Also known as liquidation bankruptcy, filing for Chapter 7 Bankruptcy will result in the sale of a your nonexempt property and distribution of the proceeds to your creditors, and result in the cancelation of most of your debts that are not secured by property.

Chapter 13:  This chapter of the Bankruptcy Code allows you to keep property and pay debts over time, usually three to five years, provided your creditors will receive at least as much money as they would if you had filed for Chapter 7.

Chapter 11:  Generally used by businesses or individual debtors with too much debt to qualify for Chapter 13, a Chapter 11 debtor proposes a plan of reorganization to keep its business alive and pay creditors over time.

Can I stop collection agencies from calling?

The filing of a Bankruptcy case triggers an automatic stay which prohibits creditors from continuing any efforts to collect from you.  The automatic stay prohibits collection calls, repossession efforts, foreclosure sales, and garnishments, and will remain in effect until it is lifted by the judge, the debtor gets a discharge, or the property is no longer property of the estate.

Can I keep any of my property?

Chapter 13 allows debtors with regular income to keep their property and repay their debts over time as described above.  Utah also exempts certain property from the reach of creditors in bankruptcy, including up to $20,000 in equity in a debtor’s principal residence and $2,500 of equity in your car.

How will Bankruptcy effect my credit?

Filing for bankruptcy will negatively impact your credit, however, by successfully completing the process and obtaining a bankruptcy discharge, you will be able to gain relief from the debt burdening you, and improve your financial situation and outlook.

Will I lose my home/car?

Depends.  If you have a large amount of equity in your home it could be sold to pay your creditors.  Utah allows you to keep up to $20,000 ($40,000 for joint filers) of the equity in your home, and $2,500 of equity in your car.