Too many times, people decide against filing bankruptcy because of inaccurate or untrue information. For example, they subscribe to the notion that it is certain they will lose important real and personal property assets when they file bankruptcy. Providing Americans with a fresh start is one of bankruptcy’s primary purposes. It is extraordinarily difficult to get a fresh start if you cannot retain real and personal property that is necessary for you and your family to live a normal life.
This is the primary purpose of exemptions, which permit Utah residents and bankruptcy debtors to keep those assets essential to gaining a fresh start. Utah state law contains a set of exemptions for Utah bankruptcy debtors. It’s no surprise that one most commonly used by debtors is the Utah motor vehicle exemption.
It is worth noting that there are both state law and federal law exemptions. Utah law requires that Utah bankruptcy debtors use the Utah state exemptions rather than the federal exemptions.
The Utah Exemptions Act does not necessarily define a “motor vehicle” within Title 78. Instead, it defines what a “motor vehicle” is not.
In Title 78B-5-506 of the Utah Code, the definition of “motor vehicle” does not include any motor vehicle designed for or used primarily for recreational purposes, such as an off-highway vehicle (defined in Section 41-22-2) or a recreational vehicle defined in Section 13-14-102.
This does not mean anyone who uses a motorcycle or van as their primary vehicle cannot claim an exemption. Exceptions to Title 78B-5-506 of the Utah Code include a van or motorcycle the party claiming the exemption regularly uses for daily transportation.
The standard exemption to which an individual is entitled in Utah is $3,000 in value of one motor vehicle. An individual is entitled to an exemption, not exceeding $5,000 in aggregate value, of motor vehicles to which no other exemption has been applied, and that is actually used by the individual in his or her principal business, trade, or profession.
Bankruptcy debtors who are married and joint debtors may double the applicable motor vehicle exemption amount. Of course, if only one spouse has ownership rights in the property, the amount may not be doubled.
For debtors to use the Utah bankruptcy exemptions, they must be a Utah resident for at least 730 days (two years) before filing their bankruptcy petition. If not, they must use the exemptions of the state in which they resided for most of the 180 days before the two-year period that immediately preceded the bankruptcy filing.
There are numerous exemptions available under Utah law. Bankruptcy courts typically construe exemptions liberally to protect the debtor, and the debtor’s family, from excessive hardship. Courts are especially vigilant in protecting the right of a debtor to retain basic necessities like an automobile.
The assistance of Theron Morrison and his team of attorneys at the Morrison Law Group may be both invaluable and indispensable to debtors who need to estimate their prospective exemptions in a bankruptcy case correctly. 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.
