The Utah Homestead Exemption

rental property in bankruptcy
Utah Homestead Exemption Law

The Utah Homestead Exemption can be used to protect your property in the State of Utah.

The term “Utah bankruptcy exemptions” refers to assets that you get to keep when you file bankruptcy. In Utah, as a practical matter, most people keep all their assets when they file bankruptcy if they do a reasonable amount of legal pre-bankruptcy planning.

Some exemptions in Utah have limits applied to  equity you might have in the property. Equity is the difference between the value of the property and what is owed on the property. For example, a car valued at $4000 with a loan of $3500 has an equity value of only $500.

Other Utah exemptions have an unlimited dollar amount in the equity that the property might have.  When you work with your attorney make sure to disclose all of your assets so they can be disclosed in the paperwork and proper exemptions applied.

The Utah Homestead Exemption:

In most cases equity you have in your homestead (Up to $42,000.00 for an individual) is exempt from creditors and you get to keep it through a bankruptcy as long as you continue to make the mortgage payments on the home. However, there are several very important exceptions to this and you need to consult with your bankruptcy attorney to make sure that any equity in your homestead is exempt.

In a Chapter 7 bankruptcy case other real estate, whether rental properties, farmland or  likewise, is generally going to be non-exempt and not protected if that property has any value over and above the mortgage.  This means the property can be taken by the trustee in a bankruptcy and used to pay your creditors.  Again working with an experienced Utah bankruptcy lawyer will help you protect all the property that your legally entitled to protect.

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