The use of your vehicle is likely an incredibly important part of your life. It provides you with transportation to get to work and make a living. It is very likely that you rely heavily on your vehicle to complete your regular operations, whether you need it to run errands or get to work. It can be devastating and incredibly disruptive to your life when you suddenly lose your vehicle and have to scramble to find another way to get to work. Due to the importance of your vehicle in your life, it is important to understand how a bankruptcy will impact the possession of your vehicle. This will help you to make the best possible decision for your specific situation.

Whenever you have any questions regarding filing for bankruptcy, you should consult with a bankruptcy lawyer, like our professional team at LeBaron & Jensen. This will help to ensure that you have all of the information that you need when you consider the bankruptcy in Utah process. This consultation can also help you to understand what debts are dischargeable through bankruptcy, as well as who is eligible. This can also help you to understand the distribution of other assets. Bankruptcy in Utah can be an incredibly complex process, so it is important to ensure that you obtain the guidance of an experienced professional.   

Various Bankruptcy Types

Ultimately, the ability to keep your vehicle will depend primarily on the type of bankruptcy that you file for. In general, individuals usually only file for either a chapter 7 or chapter 13 bankruptcy. Each bankruptcy has an array of considerations and will impact your life in different ways. Understanding the ins and outs of each bankruptcy type can ensure that you make the ideal decision for your specific situation. If you are unsure which bankruptcy will be best for you, it is crucial to consult with an expert. It tends to be easier to keep your vehicle in a chapter 13 bankruptcy than a chapter 7 bankruptcy, though there are still a few ways in which you may be able to keep your vehicle after filing for a chapter 7 bankruptcy.

Chapter 7 Bankruptcy

During a chapter 7 bankruptcy, most debts are discharged in exchange for the individual giving up their nonexempt property. The nonexempt property is sold by the bankruptcy trustee, and the funds are used in order to repay the debts that the filing individual has. Any remaining debt is typically discharged after the property has been sold. Due to the way a chapter 7 bankruptcy works, it may be necessary for the individual to surrender their car. However, this depends on the specific vehicle exemption laws present in the state.

Car Exemption Amount

Every state allows an exemption amount for certain kinds of property. This allows an individual to keep this certain type of property up to a certain monetary limit. The total amount will vary between states. It may be as little as $500 for a vehicle exemption or several thousand dollars for the vehicle exemption. Whether your car will count as an exempt possession will depend on its value in relation to the vehicle exemption amount in your state. If your vehicle is worth far more than the exempt amount, it is likely that you will be required to surrender your vehicle. In this situation, the car will be sold, and you will receive the exempt portion of the profits. The rest of the money from the sale will be distributed in order to repay other debts.

Current on Car Payments

During a chapter 7 bankruptcy, you will have to be current on car payments in order to keep your car as an exempt property. If you are behind on your car payments, it is very likely that you will lose the car. There are a few ways that you may be able to prevent this from happening. You will need to take care of the arrearage and ensure that your car payment is completely up to date. After this point, there are two possible options that may allow you to keep your vehicle. You may be able to “redeem the property” which essentially means paying the full value of the property in order to keep it. This will involve repaying all of the debt related to the vehicle, which is often difficult, especially for someone currently going through a bankruptcy.

The other option for keeping a car that you still owe money on with a chapter 7 bankruptcy is by “reaffirming the debt.” During this process, you will be required to sign for a new repayment plan with the seller. This can help to provide a new arrangement that will work for both parties. This is largely based on what will be agreeable to the seller. In most situations, the seller will want the full amount of the loan, so they will likely work with you regarding the reaffirmation of the debt.

Chapter 13 Bankruptcy

It is easier to keep your vehicle during a chapter 13 bankruptcy. This is due to the way that chapter 13 bankruptcies work. These bankruptcies allow you to keep your property and pay back your debts. Your debts are paid either in full or through a designated repayment plan. You must stay current on your car payments in order to keep your car throughout this process. Chapter 13 bankruptcies tend to be the least disruptive to your life, because they consolidate debts and allow you to keep your property.

It is incredibly important to ensure that you understand the impact that a bankruptcy will have on your life. It will result in a substantial impact on your credit and ability to obtain loans for several years following the bankruptcy. Consulting with a bankruptcy lawyer can help to ensure that you remain protected throughout the bankruptcy process and can obtain the best possible outcome. To learn more about obtaining the appropriate legal guidance to help with your bankruptcy process, contact our experts at LeBaron & Jensen today!

Understanding who can file for bankruptcy can go a long way toward informing you of your options when you have financial issues. It is important to keep in mind that bankruptcy should really be turned to as an absolute last resort for getting out of debt. Here at LeBaron & Jensen, we strive to provide a multitude of services to inform you whether bankruptcy is the best option for you and to help guide you through the bankruptcy process.

When to File for Bankruptcy

As previously stated, bankruptcy is a final resort after you have tried other options for getting out of debt. You should only file for bankruptcy after you have tried to negotiate a repayment plan with your creditors. If they refuse to work with you to form a repayment plan that you will be capable of paying, you may want to consider filing for bankruptcy. When your liabilities exceed your assets, bankruptcy may be the best option. If you find that you are going further into debt every month, it is important to take action to get out of debt. In addition, it is often a good idea to look into bankruptcy if you can’t see your financial situation improving over the next 5 years.

Who Can File for Bankruptcy?

In general, anyone is able to file for bankruptcy. However, there are certain requirements for the various types of bankruptcy. You will only be able to file for that particular type of bankruptcy if you meet all of the relevant requirements. If you are filing for bankruptcy as an individual, rather than as a business, you will most likely be eligible for either a chapter 13 bankruptcy or a chapter 7 bankruptcy. Keep in mind that your bankruptcy case may be dismissed by the court if they feel that you are trying to cheat your creditors. These cases may also result in persecution for fraud.

Who Can File for a Chapter 7 Bankruptcy?

A chapter 7 bankruptcy can’t be filed for another 8 years after a previous chapter 7 bankruptcy has been filed. Only individuals may be eligible for a chapter 7 bankruptcy, businesses will most likely have to file for a chapter 11 bankruptcy. In addition, you will not be eligible to file for a chapter 7 bankruptcy if you have had a bankruptcy case dismissed by the court in the previous 180 days. To become eligible for a chapter 7 bankruptcy, your current monthly income will be examined closely. Your monthly income will be determined based on your prior 6 months’ income. This income will be paralleled against the average income for a family of a similar size as your family. If your monthly income is less than or equal to the median income for a family the identical size as yours, you are most likely eligible to file for a chapter 7 bankruptcy. However, if your monthly income is more than the average, you will be required to meet the means test.

The Means Test

The means test is a test that examines your finances in order to determine which type of bankruptcy you are eligible for. This test determines if you have enough disposable income in order to repay at least a portion of your unsecured debts. Your disposable income is the amount of money that you have remaining after you have subtracted certain allowed expenses and required debt payments from your monthly income. If you do have a substantial amount of disposable income, it is likely that you will be required to file for a chapter 13 bankruptcy rather than a chapter 7 bankruptcy.

Who Qualifies for a Chapter 13 Bankruptcy?

A chapter 13 bankruptcy is often referred to as the “wage earner’s bankruptcy.” It is available only to individuals or married couples filing together, not to businesses. In order to qualify for a chapter 13 bankruptcy, you must have a steady source of income. In addition, there is a limit to your debts to qualify for a chapter 13 bankruptcy. Your unsecured debts are required to be less than $394,725. In addition to this, your secured debts must total an amount less than $1,184,200. This specific number is adjusted every 3 years in order to account for inflation. You are not able to file for a chapter 13 bankruptcy within a certain period of time following a previous bankruptcy or within 180 days of having a previous case dismissed.

What Debts Can’t Be Wiped Out by Bankruptcy

There are certain debts that can’t be resolved through the use of bankruptcy. Understanding which types these are can help you to decide if bankruptcy is the best approach for your particular situation. Student loans and debts to government agencies can’t be wiped out by bankruptcy. Alimony and child support payments are also not able to be resolved with bankruptcy. Other debts that can’t be wiped out by bankruptcy include income taxes, court fines or penalties, and debts for personal injuries that were caused by you driving while intoxicated.

Debts that May Be Wiped Out by Bankruptcy

Alternatively, there are many types of debt that are able to be wiped out with bankruptcy. A few of these types of debt include personal loans, credit card debt, lawsuit judgments, medical bills, and obligations from leases or contracts.

Reasons to File for Bankruptcy

There are several reasons that commonly lead to filing for divorce. Medical debt is a common thing that causes individuals to file for bankruptcy, especially because medical issues can also lead to job loss. Being sued by creditors, job loss, and divorce are all reasons that many people decide to file for bankruptcy. Keep in mind when you make this decision that it will have a long-term impact on your credit and personal life, though there are still a few benefits to bankruptcy in the right situation.

Here at LeBaron & Jensen, we strive to provide you with superior guidance to help you throughout the bankruptcy process. Our skilled team is experienced in each step of the process in order to ensure that you are able to obtain the best possible outcome. To learn more about the legal services and guidance that we are able to provide and how they can improve your bankruptcy process, contact our experts today!

Filing for bankruptcy around tax season can bring up the question regarding what happens to your tax refund during bankruptcy. Your tax refund is the amount that you have essentially overpaid in taxes throughout the year. Many people choose to pay more in taxes throughout the year and receive a tax refund during tax season. This also helps to avoid the possibility that you will end up owing money on your taxes when tax season comes around. Many people rely on their tax refund in order to pay off debts or bills, so it can be especially important to understand how your tax refund may be impacted during your bankruptcy.

Filing for Bankruptcy

Filing for bankruptcy has been shown to provide a multitude of benefits. It can help to provide you with an alternative that will allow you to pay off your debt. However, filing for bankruptcy certainly has its drawbacks as well. If you are considering filing for bankruptcy, it is incredibly important to consult with a legal professional to determine precisely how the bankruptcy will impact your situation and your life. Here at LeBaron & Jensen, we specialize in providing superior guidance to help you throughout the bankruptcy process. There are multiple types of bankruptcy and the various types of bankruptcy may impact taxes differently. The most common types of bankruptcy for individuals to file are chapter 13 bankruptcies and chapter 7 bankruptcies.

Chapter 13 Bankruptcy

In a chapter 13 bankruptcy, a repayment plan is designed to allow you a reasonable way in which to pay off your debt. In this situation, some assets are protected, which means that you will likely be able to keep your home and car. However, a chapter 13 bankruptcy requires that you use all of your disposable income to pay off your debt. In a chapter 13 bankruptcy, some debts may be dischargeable, which often means that you aren’t paying back the entire amount of your debt. Some debts, like student loans, may not be considered unsecured debts and they will be required to be paid in full.

Tax Refunds in a Chapter 13 Bankruptcy

Chapter 13 bankruptcies generally require you to spend all of your disposable income on paying off your debt. In these situations, tax refunds are often considered disposable income. Though it is largely up to the court, in the majority of cases, you will be required to surrender your tax refund in order to pay off your debts. Unfortunately, this won’t lower your ordinary plan payment. If your repayment plan doesn’t completely cover the same value that you owe, it is likely that the court will require you to put your tax refund toward paying back these debts.

Alternatively, if you owe money on your taxes, it can be beneficial to file for a chapter 13 bankruptcy. Your tax debt may be considered unsecured debt, which may be able to be discharged through the bankruptcy process. Discuss with your legal professional to determine how your tax refund will be impacted by a chapter 13 bankruptcy.

Chapter 7 Bankruptcy

A chapter 7 bankruptcy gathers your unprotected assets into a bankruptcy estate. Any unprotected assets are liquidated in order to pay back your debts. These assets will be distributed by a designated trustee, which will provide you with little influence over their distribution. Since assets are distributed by a trustee, it will largely be up to the court to determine what happens to your tax refund.

Tax Refunds in a Chapter 7 Bankruptcy

Tax refunds are often handled somewhat differently in a chapter 7 bankruptcy. In most situations, what happens to your tax refund will depend primarily on when the tax refund was earned. If the refund was earned for the work that you did before filing for bankruptcy, it is likely that it will be required to go to your bankruptcy estate, unless it is protected with an exemption. However, if it was earned after you filed for bankruptcy, it is possible that the individual may be allowed to keep their tax refund. This can become complicated depending on when the tax refund is earned and bankruptcy is filed. It may become necessary to split the tax refund between the individual and the bankruptcy estate, depending on the situation. The ultimate decision will be determined by the court.

How to Save your Tax Refund

There are a few ways that you may be able to save your tax refund throughout your bankruptcy. You may be able to keep your tax refund by waiting until after you have received it to file for bankruptcy. In these situations, you will likely want to spend it before you file for bankruptcy. Keep in mind that it should only be spent on necessities. Purchasing luxuries will be problematic for your bankruptcy process. Exemptions may allow you to protect your tax refund. Some states allow for a “wildcard exemption” which can help to protect any asset of your choice. In addition, if you don’t receive a tax refund, you don’t have to worry about protecting it. This can be done by adjusting your tax withholding. This will take less money out of your paycheck, which may ease the financial strain of the repayment plan. However, if you choose to do this, you will need to save up some extra funds in case you end up owing money on your taxes.

Here at LeBaron & Jensen, we specialize in the field of bankruptcy law. Our experienced, professional team can provide you with the information and guidance that you need to obtain the best possible outcome for your bankruptcy process. Filing bankruptcy comes with a substantial amount of legal and financial consequences, so it is vital to consult with a professional when you consider filing for bankruptcy. To obtain more information regarding how your bankruptcy will impact your tax refund, contact our experts at LeBaron & Jensen today!