Utah Bankruptcy Exemptions and Law
Key Takeaways
Utah bankruptcy law governs how state residents seek relief from overwhelming debts through Chapter 7 liquidation or Chapter 13 reorganization. Under these rules, filers must use specific state exemptions to protect assets such as their primary residence and motor vehicles, rather than federal options.
When Utah residents find themselves juggling debts, bills, and calls from credit collectors, they may need to turn to bankruptcy for debt relief. Utah state law provides residents with substantial protections during the bankruptcy process, helping them achieve a fresh start.
Utah is an “opt-out” state, meaning residents must use state exemptions rather than federal ones. Otherwise, federal bankruptcy filing rules apply to all Utah bankruptcy cases.
Utah Bankruptcy Laws
Federal law and the U.S. Bankruptcy Code determine most of how bankruptcy cases proceed. The Utah Exemptions Act contains all of Utah’s property exemptions, including homestead exemptions and other personal property exemptions.
To file bankruptcy in Utah, you must complete a credit counseling course within 180 days before filing. A list of qualified courses is available at the U.S. Department of Justice DOJ). Most can be completed online within a few hours.
You can file for bankruptcy in Utah if you have lived there for at least 180 days. To use Utah‘s exemptions, you must be a Utah resident with at least two years’ residency.
Most Utah debtors will file one of two types of bankruptcy. Let’s examine each one.
Chapter 7 Bankruptcy
Also known as a “liquidation bankruptcy,” Chapter 7 is used when a debtor has mostly unsecured debts such as medical bills and credit card debt. In a Chapter 7, a bankruptcy trustee takes over your non-exempt property (called the “bankruptcy estate”) and sells it to repay your creditors. Any remaining debt is discharged by the bankruptcy court.
To qualify for Chapter 7, debtors must pass a means test. If your income is below the median annual income for your area, you’ll automatically qualify. The court will examine your living expenses and other factors in your case if your income is slightly above that level, but you have substantial debt.
Chapter 13 Bankruptcy
In a Chapter 13, or reorganization bankruptcy, you and the bankruptcy trustee develop a repayment plan to repay your secured creditors. Your debts are consolidated so that you only make one payment through the trustee. The payment plan lasts from three to five years. You must have a stable income sufficient to cover your living expenses and the payment plan for the duration of the plan.
Chapter 13 bankruptcies are ideal for homeowners who are behind on mortgages and need to pay off secured and unsecured creditors without losing their home. They are also used by debtors who have valuable non-exempt property they don’t want to lose in a Chapter 7.
To file Chapter 13, you cannot have more than $1,580,125 in secured debt and $526,700 in unsecured debt. These totals include current and past-due obligations.
Automatic Stay
Both types of bankruptcy have an automatic stay that immediately halts collection actions against the debtor. The automatic stay is temporary, but acts as an emergency stop on:
- Foreclosure and eviction actions
- Repossession
- Lien placement and wage garnishment
- Phone calls and collection actions
The automatic stay will not halt all actions, prevent an active foreclosure, or stop an eviction if a landlord has a judgment of removal. Garnishment for child support payments is also exempt. A creditor can ask the bankruptcy court to lift the stay by filing a motion for relief from the automatic stay, and the court may grant relief for “cause,” such as lack of adequate protection.
If you file for Chapter 13, the stay remains in place as long as you are current on your repayment plan. The automatic stay gives debtors breathing room to continue pursuing their bankruptcy.
Utah Bankruptcy Exemptions
Utah is an “opt-out” state, meaning that residents must use the state exemptions listed in the Utah Exemptions Act rather than the federal exemptions in the Bankruptcy Code. These include the following:
Utah Homestead Exemption
The Utah homestead exemption protects a homeowner’s equity in their primary residence. The exact amount that can be exempted as of 2026 is $53,700 for an individual debtor and $107,400 for couples filing jointly. To qualify for the exemption, you must have lived in Utah for at least 730 days (two years).
The values are adjusted annually according to the Consumer Price Index. Debtors should consult a bankruptcy attorney before filing to confirm their total exemption amount.
Utah Property Exemptions
The purpose of a Chapter 7 is to give debtors a chance to start over when the bankruptcy discharge is done. Debtors can exempt some personal property for this purpose. You usually keep your property in a Chapter 13, but exemptions and non-exempt value still matter. Your plan must pay unsecured creditors at least as much as they would receive in a Chapter 7 liquidation.
Property exemptions may include:
- Real property (not homestead property): If you do not have a primary residence, you may claim up to $6,400 (in 2026) in other real property
- Motor vehicle exemption: Up to $3,000 of vehicle equity, or $5,000 if the vehicle is a business or commercial vehicle (There is an unlimited exemption for vehicles modified for disabled individuals)
- Household goods valued at $1,000 or less, such as clothing, furniture, appliances: Personal items like books, musical instruments, pets, etc.
- Retirement accounts: Examples include defined contribution plans(IRAs), defined benefit plans (pensions), and college savings plans if they are worth less than $200,000
- Burial plots
- Health aids necessary for healthcare and employment
- Public benefits, retirement funds, insurance payments, and personal injury settlements
- Up to 75% of your current wages
Valuable artwork and non-sentimental heirlooms, more than one firearm (of each type), and more than one residence cannot be exempted.
After the Bankruptcy
After filing for Chapter 7, any unsecured debts that cannot be paid off are discharged by the court. A Chapter 7 takes about three to six months to complete. You will lose any non-exempt assets.
In Chapter 13, you have three to five years to pay off all secured creditors. If you stay current and make a good-faith effort to repay all debts, the court will discharge any remaining deficiencies.
Some debts cannot be discharged in either type of bankruptcy. If debt remains after discharge or repayment, you must still pay it. These debts include:
- Student loans, unless you prove “undue hardship” in bankruptcy
- Child support and alimony arrearages
- Income tax debt
- Foreclosure and mortgage debts
Following both bankruptcies, filers must complete a financial management course to finish the bankruptcy process.
How a Bankruptcy Attorney Can Help
Before you file either Chapter 7 or Chapter 13, consider talking to a Utah bankruptcy lawyer. An attorney can help ensure you receive all the exemptions you should and make certain your property is protected before you file. They can appear with you during the meeting of creditors and help with other paperwork issues. Bankruptcy is a serious undertaking, and having a legal expert on your side can help you achieve the best possible outcome.
Frequently Asked Questions About Utah Bankruptcy
If you are considering bankruptcy, money is probably tight. A do-it-yourself bankruptcy saves money, at least in the short term. The forms are available here. But unless you are filing a no-asset Chapter 7, a DIY bankruptcy is probably a bad idea. These matters are much more complex than tax returns.
Some debtors work with non-lawyer bankruptcy petition preparers. But BPPs have no special qualifications. Furthermore, they can only take your money and fill out forms. They cannot offer any advice. They certainly cannot provide legal representation.
A partnership with a Utah bankruptcy lawyer is more expensive than a DIY or BPP filing. But the investment pays off. For example, an attorney can unlock some upper-level bankruptcy options which, in many cases, could save you thousands of dollars. So, ask yourself how much your family’s financial future is worth.
Nonprofessional fees, or filing fees, are usually around $350 for a consumer bankruptcy. The fees vary slightly, depending on which trustee the court assigns. A few debtors are eligible for installment plan payment or even a filing fee waiver.
Professional fees, or attorneys’ fees, usually vary as well, usually depending on the type of bankruptcy. As for the method of payment, most Chapter 7 debtors are eligible for a pre-petition installment plan. Most Chapter 13 filers can take advantage of a post-petition installment plan.
You lose most or all of your nonexempt property when you file bankruptcy in Utah. Fortunately, most people do not have a lot of nonexempt assets, unless they have helicopters and yachts. Your home, car, wages, government benefits, and retirement account are exempted (protected) from seizure. Most of your personal property is exempt as well.
Most people qualify for Chapter 7 or Chapter 13. To declare bankruptcy, ayou must file a petition and schedules. You must also attend a meeting with the trustee, complete two financial management classes, and cooperate fully with the judge and trustee.
If you have crippling unsecured debt, like high medical bills, you should probably file Chapter 7. If you have secured debt delinquency, like past-due mortgage payments, you should probably file Chapter 13.
Roughly two-thirds of Utah residents file Chapter 7 because of high medical bills. Other reasons include job loss, divorce or separation, business downturn, and reckless overspending. Many people file Chapter 7 due to a combination of two or more of these things.
Utah Bankruptcy Court
Where Can I File?
Utah’s bankruptcy court is in Salt Lake City on the third floor of the Moss Courthouse. DIY and BPP filers must normally go there in person during business hours.
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