Keeping your house during bankruptcy in Utah isn’t a simple yes or no situation. Let me summarize this in plain terms while ensuring we cover all the legal bases.
The basics
Your home’s fate largely depends on which bankruptcy chapter you choose, how much equity you’ve built up, and whether you can keep paying your mortgage. It’s as simple as that.
Protection under the law
Utah’s got your back – to a point. The state lets you shield some home equity through a homestead exemption. Singles can protect $45,000; couples filing together get $90,000. Think of it as a safety net for your house equity.
The two paths
Path 1: Chapter 7 (The Quick Route)
You might walk away with your house if your equity falls under those protection limits I mentioned. But here’s the catch – you must keep those mortgage payments flowing. Miss those, and all bets are off.
Path 2: Chapter 13 (The Long Game)
This one’s more forgiving. You get 3-5 years to catch up on what you owe. Keep up with your current payments plus whatever the court says you need to pay toward your old debt, and you’re golden.
Real talk
You’re behind on payments or swimming in equity above those protection limits. Chapter 13 might be your lifeline. It buys you time to catch up while keeping the roof over your head. But if you’re drowning in payments you can’t make, bankruptcy lets you walk away clean – no house, no lingering debt.
Critical action items
Get a bankruptcy lawyer. Don’t wing this.
Figure out exactly how much equity you’ve got.
Decide if you can realistically afford those payments long-term.
Make sure you nail the paperwork on those exemptions.
Therefore, the retention of residential property during bankruptcy proceedings is contingent upon strict adherence to the aforementioned conditions and limitations set forth under Utah state law.
