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Bankruptcy FAQs

Are you are considering filing bankruptcy? You should get all the information you can about your debt relief options so you are prepared to make a decision that is right for you.

Free bankruptcy consultation: At Roger A. Kraft, Attorney at Law, P.C., I offer a free initial consultation to discuss your bankruptcy options. Please contact my law office in Salt Lake City, Utah, for more information. Otherwise, read the information below for more information about Chapter 7 and 13 bankruptcy.

What Is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy is a fresh start and a liquidation of your debts and your estate. When you file a chapter 7, a trustee (usually an attorney) will be assigned to administer your estate and take whatever assets they can and sell them to pay your creditors. The majority of chapter 7 cases are considered "No Asset Cases," and the debtor (you) loses little or nothing because the assets are either exempt or of no value to the trustee.

How Do I Qualify for Chapter 7 Bankruptcy?

Qualifying for a chapter 7 can be tricky in some cases. Generally speaking it depends on your income. If you make more than the average family of your size, you may not qualify. However...You need a good, competent attorney (like me) with the experience and creativity (like me) to get you qualified.

What Do I Get to Keep?

Having the right attorney means everything when it comes to exempting your property so you can keep it. You need an attorney that not only understands the exemptions, but one that will be willing to fight for your right to enforce them.

Most of your assets are exempt up to a certain value. In most cases, you may keep up to $20,000 (each owner) of equity in your primary residence. What that means is that usually you get to keep your home if the trustee can't sell it for enough to pay off all mortgages and liens, closing costs etc. AND give each of the owners at least $20,000 cash. Contact us for more details.

Other exemptions include automobiles* your furniture and appliances, musical instruments*, business tools*, clothing, sentimental items*, retirement plans such as a 401K, burial plots, and many other items. Contact us for more details. (*some exemptions are allowed only up to a certain value)

What Will I Lose?

If an item of personal property is not exempt, the trustee may force you to turn that item over for sale or auction. If you really want to keep the item, most trustees will let you buy back the item from them. Most of the time this includes items such as automobiles, ATV's, boats, etc. that are paid for, and/or have value above the exemption amount. If you have a tax refund coming to you at the time you file your case you WILL lose part or all of that refund. Contact us for more detail on how to protect your tax refund.

Does Chapter 7 Stop Foreclosure, Wage Garnishment and Collection Calls?

The filing of the case will stop all efforts to collect debts, including all garnishments, foreclosures, writs of execution and all court hearings related to the debt collection. If a collector continues to harass you in any way, after they have notice of the bankruptcy filing, we may be able to have them sanctioned and get them to pay you money! (Wouldn't that be cool?)

What Happens to My Debt?

Most of your unsecured debt (credit cards, medical bills, personal loans, deficiency amounts on repossessed cars, attorney fees etc.) are completely discharged in a chapter 7. Secured debt (car loans, RC Willey etc.) can usually be reaffirmed if you want to keep the item or surrendered if you want to give the item back to the lender and be free of the debt. In some cases even taxes and student loans can be discharged. Contact us for more information.

How Long Does Bankruptcy Take?

Depending on your specific situation, a chapter 7 can take as little at 3-5 months or as long as several years. Most "No Asset" cases are closed within 4-5 months.

What Will Chapter 7 Do to My Credit?

It will lower your credit score and can stay on your credit for up to 10 years. However, most people filing a chapter 7 bankruptcy already have such bad credit that a chapter 7 doesn't really hurt them much. In fact, many lenders will be "chomping at the bit" to lend you money right after you file a chapter 7. Contact us to find out why.

How Much Does Chapter 7 Bankruptcy Cost?

In Utah, most "competent" bankruptcy attorneys charge attorney fees ranging from $750 to $1,000 per case. In addition to the attorney fees, you must pay a court filing fee of $306 and approximately $30-$50 for a mandatory credit counseling class. (Contact us for more detail) If you own a business or have some other complicated matter, costs may increase.

How Soon Can I File Bankruptcy?

As soon as you complete some personal and financial information for us and complete your credit counseling class we can be ready to file almost immediately. Occasionally we will file an "emergency" case (to stop a foreclosure or garnishment) but... be prepared to pay more in attorney fees.

I've Already Filed Chapter 7 Bankruptcy. Can I File Again?

This is one area where having the right attorney can be critical. Generally speaking you cannot file another chapter 7 case within 8 years of a prior filing. However, there may be other "creative" alternatives that will accomplish the same thing as a chapter 7. I'm not disclosing my secrets here. You'll have to come in and see me for more info.

What Is Chapter 13 Bankruptcy?

First, it's a chapter of bankruptcy that only experienced attorneys should file. If you hire an inexperienced attorney you can almost bet on having some major problems.

Chapter 13 is a reorganization of your debt. In a chapter 13 we will put together a plan paying back a portion of your debt. Other than your regular mortgage payment(s) and living expenses, you will have one monthly payment to the chapter 13 trustee.

Why Should I File Chapter 13 Bankruptcy?

Other than the fact that you probably can't sleep at night, here are some reasons;

  • You're behind on house payments and don't want to lose your house.
  • You're behind on car payments and don't want to lose the car.
  • You've got cool stuff like guns, boats, jewelry etc. that you don't want to lose.
  • Past due child support that you can't make up without garnishments etc.
  • Past due taxes that you can't make up without garnishments.
  • Your are ineligible for a chapter 7

How Much Will My Payment to the Trustee Be?

This varies from case to case depending on your assets, your debts, and your monthly income. We can usually come with a pretty good estimate by the end of your first appointment.

What Do I Get to Keep in Chapter 13 Bankruptcy?

In a chapter 13 you get to keep most of your assets. Usually the only assets you lose are luxury items that you owe money on, such as extra cars, boats, ATV's etc. In some cases we can get creative and even keep those items.

What Will I Lose in Chapter 13 Bankruptcy?

Again, if you have luxury items pledged as collateral the court may make you surrender them. The court feels that including luxury items in a plan means you will be making payments on unnecessary items. Contact us for more detail on how to keep those items.

What Happens to My Debt?

During your plan the chapter 13 trustee will make payments to your creditors. Your secured creditors such as mortgage companies and auto lenders will be paid in full during the life of your plan. The same is true for taxes and child support or alimony. In most cases your unsecured creditors will also receive a small amount. If the plan is confirmed (approved by the court) and you complete it, most of your remaining debt is discharged just like it would be in a chapter 7. Contact us for more details.

How Much Does Chapter 13 Bankruptcy Cost?

The Bankruptcy Court determines the fees in each case and they generally fall into one of 3 fee structures depending on your individual case. The attorney fees will either be $3,000, $3,250, or $3,500. These fees are not payable all up front. Most of the attorney fees will be spread out over time, which can be 3-5 years. You must also pay filing fees in the amount of $281 and a small fee for two separate credit counseling classes.

Additional Questions? Contact Me for a Free Consultation.

If you have additional questions about bankruptcy, please do not hesitate to contact my office by calling 801-871-8353 or toll free at 800-640-3207. Evening and weekend hours are available by appointment. My office is centrally located near all courthouses from Provo to Ogden. My rates are affordable, and I accept credit cards.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.