Author Archives: robertspaynelaw

Where do I pay my bankruptcy court filing fee in Utah?

You’ve got a few options. Just remember that if you are late, your case gets dismissed!

When you file bankruptcy, you are required to pay a filing fee to the court (generally $310 for a chapter 13 or $335 for a chapter 7). Some people pay it up front, but most people make those payments in installments to the court after filing. Here is the court website dealing with filing fees:

So let’s say that you filed a chapter 7 today, you could pay the court filing fee as follows:

$100 in 2 weeks

$100 in 4 weeks

$135 in 8 weeks.

The big problem arises when people actually try to make the payment. Here are the payment options that they will accept:

cash, and U. S. Postal Service money orders, cashier’s checks, travelers checks (payable to U.S. Bankruptcy Court), attorney or law firm checks (payable to the U.S. Bankruptcy Court) and American Express, Discover, MasterCard, and VISA for payment of fees.

Here is where you can make the payment:

  1. Online — There is NO online option. No, you cannot pay it online.
  2. Phone — You can call the bankruptcy court clerk at 801-524-6687 and make your payment over the phone using a debit card or someone else’s credit card. Just remember that they close their office by (or a little before) 4:30 p.m.
  3. Mail — If you really want to trust the vagaries of using actual snail mail, just make sure that you send it on time, with the right address, with the right amount. Please note that it’s a bad idea to try to pay through the mail.
  4. In Person — You can drive to the Bankruptcy Court at 450 S. Main, Salt Lake City, UT 84101, go through the security checkpoint, and pay the clerk in person on the third floor at the clerk’s office.
  5. Your Attorney — This might seem like a great idea for you: pay your attorney and he’ll make the payment for you. It’s not really a good idea at all. If you drive to your attorney’s office on the day the payment is due with cash in hand, he may or may not be in and may or may not have this payment on his radar. Pay it yourself; it’s much safer.

Honestly, just pay them over the phone the day before the payment is due. It’s clean and simple.

What are the current firearm (gun) exemptions in bankruptcy for Utah (2019)?

Much, much better than they were.

Now, I can protect any three guns of any value.

Three .22s you use to take the scouts out shooting, 3 shotguns because you really like having a sore shoulder on weekends, or even 3 Barrett 50 caliber sniper rifles (even though I’d wonder what kind of varmits you were hunting with those!).

i met with a client today who had retained a different attorney for his Chapter 7 Bankruptcy. That attorney doesn’t handle many bankruptcies, and he told the client that he could protect one of each type of gun (shotgun, pistol, rifle). The client had 2 shotguns and a handgun, and the attorney directed him to sell off on of the shotguns or risk losing it. The attorney was wrong.

The law states “any three of the following….” “Any” is a pretty broad word.

Here is the actual statute:

78B-5-505.  Property exempt from execution.

except for curio or relic firearms, as defined in Section 76-10-501, any three of the following:
(A) one handgun and ammunition for the handgun not exceeding 1,000 rounds;
(B) one shotgun and ammunition for the shotgun not exceeding 1,000 rounds; and
(C) one shoulder arm and ammunition for the shoulder arm not exceeding 1,000 rounds;

I just received notice that they’re foreclosing on my timeshare that I surrendered in bankruptcy years ago. What’s going to happen to me?

Absolutely nothing. You’re safe.

Today I received a phone call from a client who had a successful Chapter 7 case 3 years ago (successful because she received her discharge). Creditors have been quiet for years. Then, out of the blue, she receives a certified letter with the above foreclosure notice. Thankfully, she called me right away.

She did surrender this liability years ago. However, the timeshare company never bothered doing anything with it (probably because it was worthless). Now, they are selling it off, and they are required by law to notify her.

This does NOT mean that she will have a foreclosure on her credit. They will NOT be able to sue her for any deficiency balance. We gave this up years ago and wiped out the debt. The certified letter gave her notice only: she doesn’t have to respond or do anything else.

What are the median income figures for bankruptcy in Utah (August 2019)?

Basically, if you are over, then you are a chapter 13.  If you are under, then you are a chapter 7.

So I just refunded a retainer payment to some clients who didn’t understand the difference between net and gross. With one child, the magical median income number was $78,581. They told me that their income was sitting at $72,000, so it should have been a simple chapter 7. Once they sent in their paystubs, it showed that they were pulling in $98,000 a year (gross). With payroll deductions, they were netting $72,000 a year (net).When I ran their income figures through my 6 month paystub analysis, Form 122 showed that they had over $2,000 a month left over to pay their creditors off. That means that they would have to be a chapter 13 with a repayment plan of up to $2,000 a month. They didn’t like this development at all, and I refunded their money.

Now remember that these numbers can be adjusted by child support payments (received or made), larger mortgages, huge tax debt, etc.  It is a gross overgeneralization to say that if you are over that figure then you MUST be a chapter 13, but this is the baseline we start with.  That being said, here are the current figures for Salt Lake County that we use on our Form 122 (6 month average of current monthly income and disposable income):

Single:      $62,535

Married:    $68,269

Married with 1 child:   $78,581

Married with 2 children:  $88,835

Married with 3 children:  $97,835

Married with 4 children:  $106,836

Married with 5 children:  $115,835

Married with 6 children:  $124,835

Married with 7 children:  $133,835

Married with 8 children:  $142,835

Married with 9 children:  $151,835

Married with 10 children:  $160,835

If you have more than 10 children, you’re probably going to be below median.  I have 11 children, and I know how expensive that can be.

I discharged my second mortgage in a chapter 7 bankruptcy years ago. Now they are threatening to foreclose. Why?

No, you didn’t.

Well, technically, you did discharge your personal liability for that second mortgage, but it was and it is still attached to your home.

When you file a chapter 7 bankruptcy, it discharges almost all of your debt, including your mortgages. However, this just discharges the debt from you personally. If the debts are secured by a house, you still have to keep paying those debts if you want to keep the collateral.

You can chose to reaffirm the debts and re-assume personal liability for them. That way, they report positively on your credit. Or, you can keep that personal discharge but still keep making payments on the loans. So long as you keep paying the mortgages, you will keep the home. Eventually, you’ll even pay if off and own the title, free and clear.

However, just because you received a personal discharge doesn’t mean that the mortgage was discharged from your home.

In a chapter 7, you can strip (remove) non-consensual liens, like judgments, from your title. You cannot strip consensual mortgages. This means that you cannot strip or remove a mortgage that you signed and agreed to.

Now in a chapter 13, you can sometimes remove a 2nd mortgage if there was no equity in your home to secure that second mortgage. However, that involves some fairly complicated court filings, and you would know if that had happened.

If you receive a friendly phone call from your 2nd mortgage lender advising that you are in arrears for missed mortgage payments, you need to either work out a repayment plan with them directly, or maybe even file a chapter 13 to catch up on those missed 2nd mortgage payments. Otherwise, they can and will foreclose on your home.

That being said, they can take the home, but they cannot sue you personally, because your personal liability for the 2nd mortgage was discharged by your chapter 7.

Will the University of Utah Hospital sue me for my dead husband’s medical bills?

No they will not (as of July 1, 2019). That being said, most medical creditors and hospitals, including IHC, will still sue you for deceased spouse’s medical bills here in Utah.

A long-term client/friend called me out of the blue yesterday. We had been planning to file a chapter 13 because her husband had passed away and the medical creditors were circling. They had filed suits, obtained judgments, and were closing in.

She doesn’t watch the news (too depressing), but she turned on the tv to load one of her saved programs, and there was a KUTV report on a “Get Gephardt” investigation into the University of Utah’s post-death collection practices. ( I am linking the article below and cutting/pasting it).

After the report, she called the attorney for the U, explained her situation, and within 10 days, he had withdrawn all of those hospital liens/judgments against her home. Now she doesn’t need bankruptcy!

She was so happy that she called me to tell me the good news. It seemed like a very good thing to share.

Here is the article by Matt Gephardt and Cindy St. Clair:

U of U Health abolishes heavy-handed billing policy after Get Gephardt investigation

Here is the body of the article:

LAYTON, Utah (KUTV) — This past February, Jodie Elliott’s husband, Larry, passed away unexpectedly. As she began settling his affairs, a bill arrived from University of Utah Healthcare saying Larry owes $390.85 for a trip to a dermatologist.

Elliott says she called University of Utah Healthcare and informed them that her husband was deceased.

“They said, ‘Oh, well these medical bills will now become yours and we’re going to change the bills and put them in your name,’” she said. “I said, ‘I don’t understand why I’m paying these because they’re not mine. I never signed for them.'”

Sure enough, a couple weeks later the same bill arrived demanding Elliott is responsible for the debt. Elliott protested, but it didn’t do any good.

“[University of Utah Healthcare] said, ‘Well, it’s a Utah state law; whenever a husband or a spouse dies, the remaining spouse is responsible for all the medical bills.’”

When Get Gephardt reached out to University of Utah Healthcare on Elliott’s behalf, a spokesperson pointed to state law, which says that if something is a family expense, then it’s the responsibility of both husband and wife.

When Get Gephardt asked how a man going to a dermatologist is a family expense, University of Utah Healthcare referred further comment to its lobbyist, Dave Cassel, the executive vice president of the Utah Hospital Association.

“If it saves him from getting cancer down the road, I would argue it [is a family benefit],” Cassel said.

Cassel says University of Utah Healthcare is operating within the law.

“I think, like any business, they have the right to follow this law,” he said.

University of Utah Healthcare may have the right, but their competitors don’t exercise that right.

Get Gephardt called the other major hospital groups in Utah, MountainStar and Intermountain Healthcare. Both companies stated that they absolutely do not slap a surviving spouse with his or her late loved one’s bill. They’ll go after the estate and, if it’s tapped, they write off the bill.

When Get Gephardt told University of Utah Healthcare it seems to be the only organization using the heavy-handed billing policy, it had a change of heart.

“We are changing that policy,” said Kathy Delis, the administrative director of revenue cycle support service for University Hospital. “We are changing our policy to no longer bill patients’ surviving spouses for debt that’s owing. Instead, we will bill the estate or the probate.”

Larry’s bills are no longer Jodie’s problem.

Delis says the change is a direct result of Get Gephardt’s inquiries on Elliott’s behalf.

As for other surviving spouses who have been slapped with their late loved ones’ bills, University of Utah Healthcare says it is auditing its system to find out who is impacted, and plans to write off those debts, too

Why do I have to let my ex-wife (ex-husband) know that I’m filing for bankruptcy (dso)?

Because it’s the law.

That being said, you only need to list them if they are a co-debtor on something you’re listing in the bk or if you owe them a domestic support obligation (dso) like child support or alimony?

What if they’re a co-debtor?

Well, if they are a co-debtor, it means that they are also liable on the loan you are wiping out in your bankruptcy. Let’s say you both took out a car loan 2 years back, and you were supposed to pay for the car after your divorce. Unfortunately, you did not, and the car was repossessed. When you file bankruptcy, you can discharge those repo fees, but they will come after your ex for the balance. You need to let him/her know what’s happening. Even if you don’t like them, it’s the least you can do.

What if you pay them child support or alimony?

You are required to list them as a creditor in your bankruptcy, and the trustee will require you to fill out a Domestic Support Obligation form. Here in Utah, we use variants of this form: the Domestic Support Obligation Questionnaire.

The simple reason for you to fill out this DSO form is because the bankruptcy trustee needs that information to contact your ex-spouse directly. He/she is required to send two notices to your ex, the first one saying that they still have rights to receive DSO payments, and the second to say that there was a discharge of your other debts.

I am linking sample letters from the US Trustee’s Office (Department of Justice) that the trustee sends out here: .

I receive phone calls from ex-spouses of my clients wondering why they are listed in the bankruptcy case and how this will affect them. I hope that I put their minds at ease when I tell them that they will keep receiving their child support payments. We are discharging the other debts, not the domestic support obligations.

The Utah homestead exemption just jumped from $30,000 to $42,000 on May 14, 2019.

Since I’ve been practicing bankruptcy law, the Utah homestead exemption was $30,000. This means that $30,000 of equity in your home was safe from creditors. Now it’s $42,000. Woot!

On March 26, 2019, Utah Governor Gary Herbert signed an upgrade to the Utah Homestead Act, increasing the exemption from $30,000 to $42,000 (which you can double for married couples up to $84,000 in equity). The law finally took effect on May 14. See: Utah Governor Signs Law on Property Tax Exemptions.

Here’s what it means in practice: let’s say you have a home worth $100,000, and you owe $100,000. There is no equity, and your home is safe from creditors (and bankruptcy trustees wanting to sell it off).

But, try these numbers:

  1. home fmv $100,000 with a loan of $70,000 = $30,000 of equity. The homestead exemption protects that $30,000 of equity from creditors and the trustee.
  2. home fmv $100,000 with a loan of $50,000 = $50,000 of equity. The homestead protects $42,000 of that $50,000 of equity, so you have $8,000 of unprotected equity in your home.

Here is the text of the Utah Exemptions Act: Homestead Exemption, Utah Code 78B-5-502:

Effective 5/14/2019
78B-5-503.  Homestead exemption — Definitions — Excepted obligations — Water rights and interests — Conveyance — Sale and disposition — Property right for federal tax purposes.

(1)For purposes of this section:(a)”Household” means a group of persons related by blood or marriage living together in the same dwelling as an economic unit, sharing furnishings, facilities, accommodations, and expenses.(b)”Mobile home” means the same as that term is defined in Section 57-16-3.(c)”Primary personal residence” means a dwelling or mobile home, and the land surrounding it, not exceeding one acre, as is reasonably necessary for the use of the dwelling or mobile home, in which the individual and the individual’s household reside.(d)”Property” means:(i)a primary personal residence;(ii)real property; or(iii)an equitable interest in real property awarded to a person in a divorce decree by a court.
(2)(a)An individual is entitled to a homestead exemption consisting of property in this state in an amount not exceeding:(i)$5,000 in value if the property consists in whole or in part of property that is not the primary personal residence of the individual; or(ii)$42,000 in value if the property claimed is the primary personal residence of the individual.(b)If the property claimed as exempt is jointly owned, each joint owner is entitled to a homestead exemption, except that:(i)for property exempt under Subsection (2)(a)(i), the maximum exemption may not exceed $10,000 per household; or(ii)for property exempt under Subsection (2)(a)(ii), the maximum exemption may not exceed $84,000 per household.(c)A person may claim a homestead exemption in either or both of the following:(i)one or more parcels of real property together with appurtenances and improvements; or(ii)a mobile home in which the claimant resides.(d)A person may not claim a homestead exemption for property that the person acquired as a result of criminal activity.(e)(i)As used in this Subsection (2)(e):(A)”Average index number” means the average of the 12 most recent Consumer Price Index numbers that are available in December in the year previous to the calendar year that is calculated in Subsection (2)(e)(iii).(B)”Consumer Price Index number” means a monthly number for the unadjusted Consumer Price Index for All Urban Consumers for all items as published each month by the Bureau of Labor Statistics of the United States Department of Labor.(ii)The dollar amounts in Subsections (2)(a) and (b) are for May 14, 2019, through December 31, 2019.(iii)For the calendar year 2020 and a calendar year after the calendar year 2020, the state auditor shall:
(A)calculate new dollar amounts for each dollar amount in Subsection (2)(a) and (b) by multiplying the dollar amount in Subsections (2)(a) and (b) by the average index number, dividing the result by 251, and rounding to the nearest 100 dollars; and(B)publish on the Office of the State Auditor website the new dollar amounts calculated under Subsection (2)(e)(iii) no later than January 1 of the applicable calendar year.
(3)A homestead is exempt from judicial lien and from levy, execution, or forced sale except for:(a)statutory liens for property taxes and assessments on the property;(b)security interests in the property and judicial liens for debts created for the purchase price of the property;(c)judicial liens obtained on debts created by failure to provide support or maintenance for dependent children; and(d)consensual liens obtained on debts created by mutual contract.
(4)(a)Except as provided in Subsection (4)(b), water rights and interests, either in the form of corporate stock or otherwise, owned by the homestead claimant are exempt from execution to the extent that those rights and interests are necessarily employed in supplying water to the homestead for domestic and irrigating purposes.(b)Those water rights and interests are not exempt from calls or assessments and sale by the corporations issuing the stock.
(5)(a)When a homestead is conveyed by the owner of the property, the conveyance may not subject the property to any lien to which the property would not be subject in the hands of the owner.(b)The proceeds of any sale, to the amount of the exemption existing at the time of sale, is exempt from levy, execution, or other process for one year after the receipt of the proceeds by the person entitled to the exemption.
(6)The sale and disposition of one homestead does not prevent the selection or purchase of another.
(7)For purposes of any claim or action for taxes brought by the United States Internal Revenue Service, a homestead exemption claimed on real property in this state is considered to be a property right.