The purpose of bankruptcy is to obtain a fresh start in life. The U.S Bankruptcy Code provides numerous exemptions that allow people filing bankruptcy to shield and keep the property they own. But some states do not use the federal law to protect property in bankruptcy they use the law of the state where the case if filed. These laws are called exemption laws. Utah bankruptcy filers are allowed to protect the majority, if not all, of their personal property when they file a bankruptcy. This post will cover some of the Utah bankruptcy property exemptions.
The Utah legislature has decided that it is appropriate for you to keep a modest vehicle, some of the equity in your home, $1000 of household goods, and clothing under Utah law. Although a common misconception, not everyone filing bankruptcy is allowed to keep their car.
Here are some of the specific exemptions so you have an idea what property you can keep (exempt) when you file for bankruptcy:
Utah Vehicle Exemption
An individual filing a bankruptcy (both the husband and wife in a joint case) are allowed to exempt and keep equity of $3,000.00 in a vehicle. The motor vehicle exemption is the most common exemption in Utah.
Utah Tools of Trade Exemption
This exemption applies to “tools” used by the debtor for his/her work. A contractor or mechanic, for example, can claim this exemption for tools used for work. The term “tools” has a broad definition by law, and can even apply to a horse, saddle, and tack if you’re employed as a ranch hand and are required to ride a horse.
Utah Homestead Exemption
One of the most important exemption is the homestead exemption. In Utah, people are allowed to exempt and keep, $42,500.00 (This amount auto adjust annually) in equity in a home in which they live. If you do not live in the property you can exempt $5000.00.
Utah Personal Injury Exemption
Settlement proceeds which you might receive in an injury case (personal injury or workman’s compensation) are 100% exempt.
There are numerous other exemptions, but those described above are an example of the most common ones. In some cases, special steps must be taken to protect and claim an exemption. We advise that you review your circumstances with a an experienced Utah bankruptcy attorney.