Chapter 7 Bankruptcy: Understanding Homestead Exemption in UtahInk Well Mag January 25, 2017 0 COMMENTS
When you file for Chapter 7 in Utah, the state’s homestead bankruptcy exemptions statute safeguards some of your home equity. Although some states allow individuals to also use federal exemptions, this is not the case in Utah. This means that if you live and file for bankruptcy in Utah, you could only use the specific bankruptcy exemptions of the state.
How Much is the Homestead Exemption?
According to Utah’s bankruptcy exemption system, you might exempt as much as $30,000 of your home or other real property stated in the exemption rules. You could use it to protect several parcels of land, provided that it doesn’t exceed one acre. In the event that you and your spouse filed for joint bankruptcy, you could double the $30,000 homestead exemption amount to $60,000.
This homestead exemption is only applicable to “real property”, which includes your house or mobile house. You could likewise choose to protect your water rights (if you own them) but only if you use the water for irrigation or domestic purposes. The exemption would also apply to proceeds of the sale for up to a year following the sale of your property. Take note however that you could only use the $30,000 to safeguard your personal primary residence in a Chapter 7, says a bankruptcy attorney in Sandy. He adds that if you choose to protect other property that’s not your main residence, you could only avail $5,000.
Other Crucial Thins to Keep in Mind
According to the homestead exemption rules, you should first file a homestead declaration, which is basically a form your need to file with the recorder office in your county to put on record that you have a right to the exemption. Without this form, you can’t claim the exemption. It’s likewise important to note that you won’t be allowed to use the exemption for protecting your property from debts you have accumulated due to property assessments or taxes, child support, mortgage, or liens against it via mutual contract.