Written by Attorney Karra Kingston.
Updated August 17, 2020
If you’re stressed out because your debts are piling up, you may want to consider filing a Utah bankruptcy case. To file a Chapter 7 bankruptcy you must complete the Chapter 7 Means Test to show you are eligible to do so. The Means Test was implemented back in 2005, when Congress made significant changes to the Bankruptcy Code. The Means Test helped eliminate the concern that people were abusing the bankruptcy process. Congress believed that people were filing for Chapter 7 relief even though they could afford to pay some, or all of their debts were abusing the system. Today, Chapter 7 relief in Utah is available only to the people who truly need it as determined by the two parts of the bankruptcy Means Test in Utah. The first part looks at your gross income. If your current monthly income is less than the median income for a family of your size in Utah, then you are immediately qualified for Chapter 7 relief. If your current monthly income is higher than the median income, you can still qualify by completing the second part of the Chapter 7 Means Test. This part of the bankruptcy Means Test in Utah not only looks at your income, but also considers your monthly expenses to determine your disposable income. If you can show that there is little or no disposable income left at the end of the month after going through the full calculation, you can file your Utah bankruptcy as a Chapter 7 case.
Utah Median Income Levels
Utah Median Income Standards for Means Test for Cases Filed On or After May 1, 2020
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Discharge in Bankruptcy for Utah
After you file bankruptcy there are several steps you must take to get a discharge at the end of your Chapter 7 case. Getting your discharge means that your Utah bankruptcy case was successful. The Utah bankruptcy discharge is an order entered by the Court stating that your debts are eliminated. This means that you don’t have to pay them back. It’s important to know that some debts, like child support, student loans and some recent tax debts will survive a bankruptcy because they are non-dischargeable. Unlike these debts, your unsecured debts like credit cards and medical bills will be eliminated by your Utah bankruptcy discharge. A discharge is not guaranteed, which means that you must take steps to make certain that you will get your discharge. Some of these steps include being honest, filing all of your paperwork, and attending your Meeting of Creditors with your Trustee. If you are denied a discharge, you must keep paying your creditors. Upsolve can help walk you through all of these details, step by step. Upsolve is a free resource to help you file your Utah bankruptcy without a lawyer. After your Meeting of Creditors has concluded your discharge should be entered about 60 days later. Even though it’s important to note that your bankruptcy discharge does not mean that your Utah bankruptcy case is closed, once the Court enters your discharge you can be on your way to a fresh start!
Utah Means Test Calculator
If you pass the Chapter 7 Means Test based on the income limits, you can celebrate and move forward with your Utah bankruptcy under Chapter 7 of the Bankruptcy Code! If you do not pass because your current monthly income, based on the average of all household income over the last 6 months, is higher than the median income, there is still hope! You will need to go to the second part of the bankruptcy Means Test in Utah to see if you qualify. There are many online calculators that can help you determine whether you qualify for a Chapter 7 bankruptcy. It’s very important to make sure that you are using the most up-to-date Utah Means Test Calculator and keep in mind that free online calculators may be inaccurate or out-of-date. Qualifying under the Chapter 7 Means Test is the only way to file a Chapter 7 bankruptcy so it’s important that you use an up-to-date calculator. Luckily, Upsolve’s Utah Mean Test Calculator is always up-to-date.
What Happens if I Fail the Means Test for Utah?
If you fail the bankruptcy Means Test in Utah, check to see if you miscalculated. Even one number can throw off the entire calculation. If your numbers are correct, go through your expenses to make sure that you included all possible expenses. It can be easy to miss an expense if it’s something you only buy a couple of times per year like an oil filter for your car. If you do have expenses that are only a few times a year, divide the amount you spend by 12 to calculate the monthly amount. It’s important to really go through your expenses. Sometimes, people do not realize how much they spend on food or gas and having accurate numbers could be enough to pass the Means Test. If you are still not able to pass the Chapter 7 Means Test after reviewing your expenses you may want to wait to file. If your income will change in the near future, you may be able to qualify then. For example, if you are a landscaper and only work in the summer, but not during the winter, it may be best to wait until after the winter to file because your monthly income will be less. You can go through the steps to get ready for your Utah bankruptcy if you might qualify in the future. If you still do not qualify then a Chapter 13 bankruptcy may be something to look into.