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*Please note: our office does not represent you and no attorney-client relationship exists until a retainer agreement is signed.

File Bankruptcy in Utah: Chapter 7

Step 1 - Making the Decision:

Many reasons prompt a person to consider filing bankruptcy.

A notice of foreclosure, garnishment, bank set-offs,

repossessions, and overwhelming debt such as unforeseen medical bills or tax debts are some of the reasons that people face when deciding to file bankruptcy. Once someone starts to consider bankruptcy as an option they often seek the advice of an attorney to help them make that decision. This is often critical to greater success in a bankruptcy case. We often find that people proceed on their own for sometime before seeking counsel from a bankruptcy attorney. This, for example, sometimes results in losing the ability to exempt property or losing other advantages in planning for bankruptcy filing that could be realized through the advice of a Utah bankruptcy attorney. This is why we offer a free initial consultation.

In order to file a Chapter 7 bankruptcy in Utah, most potential filers must complete the means test. The means test is an important determiner of whether someone whill qualify to file Chapter 7 or be required to file Chapter 13. We offer free means test calculators designed specifically for people in Utah in need of debt relief determine whether they will pass the means test.

Step 2 - Pre-Bankruptcy Filing Steps:

Before a bankruptcy case is filed certain steps must be undertaken. Once you retain our office we help you to provide all of the information required by the bankruptcy court. At the outset you receive from our office a detailed, but easy to understand letter laying out all the steps you need to take in order to help your attorney represent you in your bankruptcy case. You complete a comprehensive bankruptcy questionnaire detailing your 1) basic identifying information, 2) real property, 3) personal property assets, 4) creditors, 5) executory contract such as leases, 6) a detailed statement of your monthly income, 7) a detailed statement of your monthly expenses as they will be after the bankruptcy, and 8) a statement of your financial affairs. In some cases, you may be experiencing harassment from creditors. If that is the case, we write letters on your behalf to such creditors so that the harassment is stopped. Once you have completed the questionnaire we go to work in preparing the bankruptcy petition and schedules. We exempt as much of your property as can be exempted under Utah's exemption law. Any property that cannot be exempted may need to be turned over to the bankruptcy trustee unless the trustee abandons the property. If necessary, we will advise you on ways to convert non-exempt assets into exempt assets. Before we file, you will need to complete a pre-bankruptcy debt counseling course as required by the bankruptcy code. We suggest using either Cricket Debt Counseling or for an even cheaper alternative, http://www.consumerbankruptcycounseling.info/. After we have reviewed your information and prepared the paperwork we meet with you to go over all the paperwork with you, answer any questions, and make any necessary corrections, additions, or deletions. Once you have reviewed the paperwork and agree that it is accurate, you sign the paperwork and our office files the paperwork electronically with the Utah Bankruptcy Court. The filing fee for a Utah Chapter 7 bankruptcy is $306.

If your situation involves an emergency, such as an imminent foreclosure or other immediate legal action by a creditor, then a bankruptcy filing can usually be done the same day of your initial consultation with our office. In an emergency matter, we help you file the minimum required paperwork to open a case and then file the remaining paperwork within fourteen days. You will also need to complete required pre-bankruptcy counseling within fourteen days.

Step 3 - Meeting of Creditors:

About 20 to 40 days after your bankruptcy petition is filed you will attend the 341a Meeting of Creditors. Our office will also send a copy of your most recent tax return as is required prior to the 341a meeting (review our blog post "Unfiled tax returns and bankruptcy"). These meetings often cause fear within bankruptcy filers. However, the majority of the time the meeting lasts a mere five to ten minutes, does not involve grueling questioning, and only involves questioning by the bankruptcy trustee as creditors do not normally attend (R.C. Willey seems to always have a representative though). You are first put under oath and then the meeting begins by you providing the trustee with the following: 1) proof of social security number; 2) proof of identity usually with a driver's license; 3) copies of all bank accounts showing a balance on the date of bankruptcy filing; 4) a pay stub received after filing; 5) a copy of the most recent property tax assessment for any real property you own; 6) if you own a business or are self-employed: a) a profit/loss statement and b) a business questionnaire; 7) proof of charitable contributions made within 60 days of filing; and 8) a domestic support obligation (DSO) questionnaire if you have a domestic support obligation. Prior to the meeting of the creditors our clients receive a letter detailing the questions usually asked by the trustee so they are well prepared. The trustee may request further documentation to be provided after the creditor's meeting, which we will help you provide.

Step 4 - Financial Management Course:

Within 45 days of the meeting of the creditors the bankruptcy filer must file a certification that the required post-filing financial management course was completed. The course can actually be taken as soon as the case is filed and it is best to get the course done early. Our office recommends Solid Start because of its reasonable price of $24 for either a single or joint filer.

Step 5 - Chapter 7 Trustee's Report:

After the creditor's meeting the trustee determines whether assets are available to liquidate. If there are none, the trustee files a "no asset report" with the court. If assets are available, then the trustee, for example, may direct the bankruptcy filer to deliver non-exempt assets to the trustee. In many cases, the trustee will direct tax returns to be filed in a timely manner the following year, to provide copies of tax returns, and to promptly turnover any non-exempt refunds received.

Step 6 - Discharge & Case Closure:

The 341a meeting notice sent to all parties and creditors in the case will have deadlines by which objections to discharge or motions to dismiss are due (usually 45 days after the meeting of the creditors). Assuming no objections or motions to dismiss are filed, the court will enter a discharge order. If a financial management certificate is not filed within the 45 day time period above, then the case will be closed without a discharge. We will help you to get all of the required paperwork into the court to ensure you get the discharge you need for a fresh start. Once a discharge is entered the court will close the case as a separate event. In a "no asset" case, discharge typically takes place approximately four to five months after filing the bankruptcy case.