Legal Question in Bankruptcy in Utah

Re: Exempt property

Utah allows an exemption of $20,000 in equity if you have filed homestead exemption documents. (See UCA 59-2-103) This amount is generally calculated from the "quick sale" value of the home, less costs of sale. Thus if your house would sell within 90 days or less at $100,000, and the realtor charges a 6% commission, that would leave a net value of $94,000. If all of your balances on your mortgages were more than $74,000 you would be allowed to retain your home. Generally, if you are reasonably close to those figures, the court will be liberal, and will not force the sale of the house. The Trustee does not want to waste his time to collect only a small amount of money, especially concerning homes which may not sell quickly.

In a Chapter 13 bankruptcy you can retain your home regardless of the equity you have, subject to the court confirming a plan which provides for some payment to your creditors. The court has discretion to allow retention of any property, real or personal, based on the plan.

If you obtain quick sales values from 2-3 realtors, which show you have less than $25-30,000 net equity in your house, the court most likely will allow you to keep your house. But it is at the discretion of the court.