Exemptions allow Utah bankruptcy debtors to retain important assets that are necessary for a fresh start. Utah law provides a system of exemptions for all Utah residents who file Chapter 7, 11, 12, and 13 bankruptcy cases. These exemptions include provisions for keeping certain firearms. When bankruptcy debtors exempt property, they are choosing to exclude it from their bankruptcy estate. Thus, this property survives the bankruptcy, and they are permitted to keep it since they continue to own it outright.
A fundamental underlying policy of bankruptcy law is that Americans should have the ability to obtain a fresh start when financial concerns become burdensome. Many Utah residents believe that filing bankruptcy will cause them to lose most, if not all, of their valuable material possessions.
Under the Utah Code, 78B-5-505, except for curio or relic firearms, Utah debtors may keep any three of the following firearms:
- one handgun and ammunition for the handgun not exceeding 1,000 rounds;
- one shotgun and ammunition for the shotgun not exceeding 1,000 rounds; and
- one shoulder arm and ammunition for the shoulder arm not exceeding 1,000 rounds;
Note that this does not mean one of each but any three of the listed weapons. Thus, a debtor could own and exempt three handguns or two shotguns and one handgun, etc.
Debtors may not exempt “curio” or “relic” firearms, which, of course, may carry significant value to collectors. A curio or relic firearm is a piece that is of special interest to a collector because of a quality that is not associated with firearms intended for sporting use, or use as an offensive or defensive weapon. It must have been manufactured at least 50 years before the current date, and must not be a replica of a firearm manufactured at least 50 years before the current date.
A curio or relic firearm must be certified by the curator of a municipal, state, or federal museum that exhibits firearms to be a curio or relic of museum interest. Finally, it must derive a substantial part of its monetary value from the fact that the firearm is novel, rare, bizarre, or because of the firearm’s association with an historical figure, period, or event, and has been designated as a curio or relic firearm by the director of the United States Treasury Department Bureau of Alcohol, Tobacco, and Firearms under 27 C.F.R. Sec. 478.11.
One of the most important steps in preparation for filing a bankruptcy case is correctly classifying exemptions. The attorneys at the Morrison Law Group can help anyone considering bankruptcy maximize their Utah property exemptions and retain the greatest amount of property permitted by state and federal law. Call 801.456.9933 today 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.