When a bankruptcy case is filed, debtors are required to file information that provides a meaningful snapshot of their financial portfolio. Debtors list their assets, liabilities, income, expenses, and other miscellaneous information on schedules and statements filed with the U.S. Bankruptcy Court. One of the most important schedules is Schedule “C,” which lists a debtor’s exempt property.
One of the primary purposes of the United States bankruptcy system is to provide Americans with a “fresh start” when they have experienced financial turmoil. Under this rationale, any type of bankruptcy system that would take a debtor’s most important assets would be ineffectual and, therefore, pointless. It is simply illogical for bankruptcy to leave a debtor in the same destitute position he or she was in prior to filing bankruptcy.
Thus, any debtor (and especially the debtor’s dependents) must be allowed to retain basic property such as clothing, automobiles, household goods, furniture, and even equity in a homestead. As a means to this end, exemptions allow Utah residents and bankruptcy debtors to keep important assets necessary for a fresh start. Utah law provides a set or system of exemptions for all Utah residents who file Chapter 7, 11, 12, and 13 bankruptcy cases.
Debtors list their exempt property on Schedule “C,” which Form B106C – Schedule C: The Property You Claim as Exempt (individuals). By exempting property, bankruptcy debtors are exercising their choice to exclude the property from their bankruptcy estate. This is important because any property in their bankruptcy estate may be liquidated by the trustee, who may use the proceeds to pay creditors. Thus, exempt property is excluded from a Chapter 7 estate and case, and debtors may continue to keep and use the property as they did prior to filing bankruptcy.
Schedule “C” is arguably the most important schedule, or even document, that a debtor under any chapter completes when filing for bankruptcy since it contains a debtor’s exemption claims. These exemptions allow debtors to keep or retain property, which would otherwise become the property of a debtor’s bankruptcy estate and within reach of creditors. Theron Morrison can help any bankruptcy debtor correctly determine and list their bankruptcy exemptions.
The Morrison Law Group has helped 8,000 people file bankruptcy and gain a fresh start. We’ve helped over 20,000 Utah residents deal with all types of financial difficulties caused by various severe and tragic events. Talk to us today about your Chapter 7 or Chapter 13 bankruptcy options. Call 801.456.9933 to schedule a FREE consultation. We have locations in Ogden, Logan, Sandy, and St. George to serve the residents of the counties of Weber, Cache, Salt Lake, Utah, Morgan, Davis, Washington, and surrounding areas.