Filing for bankruptcy gives you a unique opportunity to get rid of your huge debts or to consolidate them for lower repayments. It also delays foreclosures or seizure of assets, allowing you to save your properties while getting your finances back on track. The entire filing process, however, can be complex and confusing for many individuals.

In Utah, filing for bankruptcy requires a petition to your district’s federal bankruptcy court. This petition is usually prepared and submitted by a bankruptcy lawyer. But, before that, you must decide on the type of bankruptcy you will file.

Our Chapter 13 bankruptcy attorney, Utah lawyer Jody Howe, says there are various types of bankruptcy for individuals and small businesses, but the two most common are Chapter 7 and Chapter 13.

Chapter 7 Bankruptcy

In this type of bankruptcy, the court considers your non-exempt properties as possible means to pay back your creditors. Non-exempt properties may include bank account funds, securities like bonds or stocks, and valuable items such as an antique collection. When you file a Chapter 7 bankruptcy, you have to surrender your non-exempt assets to the bankruptcy trustee. The trustee will then sell those properties and use the proceeds to pay off your debts.


Chapter 7 bankruptcy is ideal if you are willing to forego your non-exempt properties. It is also a good option for low-income debtors with little to no assets. After all, it offers quick financial relief, especially for those who cannot repay their debts in a three- or five-year repayment plan.

You are eligible for Chapter 7 if you have an average monthly income (within six months before your application) that is equal to or less than the median income in Utah. You must also be a resident of the state for at least 91 days. If you are eligible and want to pursue this bankruptcy type, you need to make an inventory of all your personal properties. Hire our Chapter 7 attorney in Salt Lake City, as well, to help you determine which of your property is exempt and non-exempt.

Chapter 13 Bankruptcy

If you want to file for bankruptcy but still want to retain your valuable assets after the filing process, a Chapter 13 bankruptcy filing is your best bet. It allows you to settle your unpaid mortgage and other loan payments over time, giving you the opportunity to save your home from foreclosure or your car from repossession. It works like a consolidation loan, in which you can develop a favorable plan to repay all or part of your debts and make those payments to a trustee. The trustee will distribute the payments to your creditors—you will no longer have direct contact with them. Thus, while making these payments, you are also protected from harassment by debt collectors, wage garnishments, and the risk of lawsuits.

Any individual, even if self-employed or a business owner, is eligible for Chapter 13 bankruptcy as long as the amount of their debts meet the requirements. Secured debts must be less than $1,184,200 while unsecured debts should be less than $394,725.

If you still aren’t sure about which type of bankruptcy you should file, get in touch with us today. Let’s discuss the complexity of your case, and our lawyer—who has represented thousands of individuals in both Chapter 7 and 13 bankruptcy cases—will provide the best option for your unique circumstances.

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