Archive for September, 2013

Practical Bankruptcy in Utah: Keeping an Important Asset in Chapter 7 Even If It’s Not Exempt

In Utah You don’t necessarily need Chapter 13 to protect an exposed asset. The bankruptcy trustee in Chapter 7 is usually willing to make a deal.   Most people filing Chapter 7 “straight bankruptcy” do not have any of their assets at risk. Everything they own is covered by property exemptions, meaning that everything fits within the types and amounts of assets which are protected from their creditors. But if you do own one or more assets which are not exempt, and which you want to keep, what then? Chapter 13 can often be a good tool for preserving such…

Practical Bankruptcy in Utah: Passing the Income Side of the “Means Test” to Qualify for Chapter 7

The easiest way to pass the “means test” in Utah is to have below median income. Here’s how it works.   The Means Test and the “Presumption of Abuse” “Abuse” is a loaded term, but it has a very special meaning in the bankruptcy phrase “presumption of abuse.” This phrase comes from the idea that only people who truly need a Chapter 7 “straight bankruptcy” should be allowed to file one. Others supposedly should either not be in bankruptcy at all or should be in a Chapter 13 case paying all they can afford to their creditors during a three-to-five-year period.…

Utah Practical Bankruptcy: Stopping an IRS Levy and Resolving Your Income Tax Debts through Chapter 13

Chapter 7 can only help in certain tax debt situations. Chapter 13 “adjustment of debts” is both more powerful and more flexible.   What Chapter 7 Can and Can’t Do As the last post explained, a Chapter 7 “straight bankruptcy” may be able to help by, first, stopping any pending IRS levy on a paycheck or other assets—at least for a few months, and then either:
  • discharging (legally writing off forever) certain—particularly older—income  tax debts;
  • discharging enough of your other debts so that you can afford to enter—after the Chapter 7 case is completed—into a reasonable monthly payment plan with the

Practical Bankruptcy in Utah: Stopping an IRS Garnishment with Chapter 7

Even though in Utah a 3-to-5-year Chapter 13 case is often the best option for income tax debts, sometimes all you need is a simpler Chapter 7. What Chapter 7 Can Do If you owe income taxes and the IRS is chasing you hard, a Chapter 7 “straight bankruptcy” will definitely do one thing: it will immediately stop the IRS in its tracks. An ongoing garnishment of wages or seizure of assets will be stopped. A threatened tax lien recording against your home will be stopped. The threatening letters and phone calls will stop. At least for a few months.…

Practical Bankruptcy: Stopping Collection of Child Support Arrearage

Logan Utah Chapter 7 “straight bankruptcy” does not stop aggressive collections by your ex-spouse or by support enforcement. But Chapter 13 does.   If you are behind on your court-ordered support payments, most states’ laws give your ex-spouse and the support enforcement agencies powerful collection tools to use against you. Much more powerful ones than are available to ordinary creditors. We’re not just talking about garnishment of your checking account or paycheck. Your income tax refund can be grabbed. Your driver’s license can be suspended, including a commercial license that you rely on for your job. In fact in many states…

Practical Bankruptcy in Utah: Vehicle Loan “Cramdown” Under Chapter 13

Do you absolutely need to keep your vehicle, but have difficulty making the monthly payments?  You may qualify for a “cramdown.”    In our last blog we talked about stopping your vehicle from being repossessed, and then bringing it current and keeping it through a Chapter 7 “straight bankruptcy.” But what if you can’t afford the regular payments? What if you have no way to bring it current quickly? What if you have special obligations, like recent income taxes or back child support, which would not be discharged (legally written off) in a Chapter 7 case and so make it impossible…