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Is filing for bankruptcy protection the right move?

Evaluating factors to determine if filing for bankruptcy protection is a good idea can be challenging for some individuals. This is why it is so important to have an attorney that is experienced in bankruptcy law. Some are very reluctant to file, while others are anxious to file and start their financial lives over. Whatever a person's feelings about bankruptcy are, there are a few factors that should be kept in mind when trying to determine whether bankruptcy would be beneficial. For example, individuals who find themselves unable to meet their monthly obligations might find filing beneficial.

The bankruptcy process

Those who are interested in filing for bankruptcy protection in Utah or any other state must participate in both pre-bankruptcy counseling and a pre-discharge education course. More specifically, as part of the qualification process for a bankruptcy filing, an individual must prove that he or she has taken a credit counseling course from an approved agency prior to filing for bankruptcy. Further, individuals will also have to take a debtor education course prior to receiving a bankruptcy discharge. While these classes may seem a waste of time, they are required. Both of the required classes can be taken online or by telephone.

Factors to take into account

Individuals who are interested in pursuing bankruptcy protection should take a number of factors into consideration. Some of those factors include:

  • Selecting an attorney that is very experienced in bankruptcy law.
  • Determining which bankruptcy options are available based on the specific situation.
  • Ensuring eligibility for the chapter of bankruptcy you want to file.
  • Determining what debts will and won't be eliminated, and confirming what will happen with certain property if a filing is made.

Most individuals tend to select between two primary types of filings - Chapter 7 and Chapter 13 bankruptcy. A Chapter 7 filing, which is also known as liquidation or "fresh start", can eliminate most of a person's unsecured debts. But in return for that debt elimination, a person might be required to give up some of his or her personal property. Utah, however, does allow for certain property and assets to be exempt from liquidation. This is where having an experienced attorney is crucial.

Chapter 13 is a chapter of bankruptcy where you pay back some of your debt. Typically chapter 13 is utilized by those who have a regular income and can make the required payments under a repayment plan for the next three to five years. Under this Chapter, the individual will usually be allowed to keep his or her valuable assets, like homes and cars. Individuals should note that certain criteria must be met for each of the different types of filings, and not all debts will be eliminated or forgiven.

Those who have questions about whether or not filing for bankruptcy protection is a good idea for them should consider speaking with a local attorney who can describe the options and work to find a suitable solution.