Utah Bankruptcy Laws : Utah State Exemptions

Complete state of Utah bankruptcy exemptions laws which protect a debtor’s property when personal bankruptcy is filed.

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” is as 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 which is not the primary personal residence of the individual; or
(ii) $20,000 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; however

(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 $40,000 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.

(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 it 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.

70C-7-103. Definitions — Limitation on garnishment.

(1) As used in this part:

(a) “Disposable earnings” means that part of the earnings of an individual remaining after the deduction from those earnings of amounts required by law to be withheld.
(b) “Garnishment” means any legal or equitable procedure through which the earnings of an individual are required to be withheld for payment of a debt.

(2) The maximum part of the aggregate disposable earnings of an individual for any pay period which is subjected to garnishment to enforce payment of a judgment arising from a consumer credit agreement may not exceed the lesser of:

(a) 25% of his disposable earnings for that pay period; or
(b) the amount by which his disposable earnings for that pay period exceed 30 hours per week multiplied by the federal minimum hourly wage prescribed by Section 6 (a) (1) of the Fair Labor Standards Act of 1938, 29 U.S.C., Section 206 (a) (1), in effect at the time the earnings are payable.

(3) No court may make, execute, or enforce an order or process in violation of this section.

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

(1)

(a) An individual is entitled to exemption of the following property:

(i) a burial plot for the individual and the individual’s family;
(ii) health aids reasonably necessary to enable the individual or a dependent to work or sustain health;
(iii) benefits the individual or the individual’s dependent have received or are entitled to receive from any source because of:

(A) disability;
(B) illness; or
(C) unemployment;

(iv) benefits paid or payable for medical, surgical, or hospital care to the extent they are used by an individual or the individual’s dependent to pay for that care;
(v) veterans benefits;
(vi) money or property received, and rights to receive money or property for child support;
(vii) money or property received, and rights to receive money or property for alimony or separate maintenance, to the extent reasonably necessary for the support of the individual and the individual’s dependents;
(viii)

(A) one:

(I) clothes washer and dryer;
(II) refrigerator;
(III) freezer;
(IV) stove;
(V) microwave oven; and
(VI) sewing machine;

(B) all carpets in use;
(C) provisions sufficient for 12 months actually provided for individual or family use;
(D) all wearing apparel of every individual and dependent, not including jewelry or furs; and
(E) all beds and bedding for every individual or dependent;

(ix) except for works of art held by the debtor as part of a trade or business, works of art:

(A) depicting the debtor or the debtor and his resident family; or
(B) produced by the debtor or the debtor and his resident family;

(x) proceeds of insurance, a judgment, or a settlement, or other rights accruing as a result of bodily injury of the individual or of the wrongful death or bodily injury of another individual of whom the individual was or is a dependent to the extent that those proceeds are compensatory;
(xi) the proceeds or benefits of any life insurance contracts or policies paid or payable to the debtor or any trust of which the debtor is a beneficiary upon the death of the spouse or children of the debtor, provided that the contract or policy has been owned by the debtor for a continuous unexpired period of one year;
(xii) the proceeds or benefits of any life insurance contracts or policies paid or payable to the spouse or children of the debtor or any trust of which the spouse or children are beneficiaries upon the death of the debtor, provided that the contract or policy has been in existence for a continuous unexpired period of one year;
(xiii) proceeds and avails of any unmatured life insurance contracts owned by the debtor or any revocable grantor trust created by the debtor, excluding any payments made on the contract during the one year immediately preceding a creditor’s levy or execution;
(xiv) except as provided in Subsection (1)(b), any money or other assets held for or payable to the individual as a participant or beneficiary from or an interest of the individual as a participant or beneficiary in a retirement plan or arrangement that is described in Section 401(a), 401(h), 401(k), 403(a), 403(b), 408, 408A, 409, 414(d), or 414(e), Internal Revenue Code; and
(xv) the interest of or any money or other assets payable to an alternate payee under a qualified domestic relations order as those terms are defined in Section 414(p), Internal Revenue Code.

(b) The exemption granted by Subsection (1)(a)(xiv) does not apply to:

(i) an alternate payee under a qualified domestic relations order, as those terms are defined in Section 414(p), Internal Revenue Code; or
(ii) amounts contributed or benefits accrued by or on behalf of a debtor within one year before the debtor files for bankruptcy. This may not include amounts directly rolled over from other funds which are exempt from attachment under this section.

(2) The exemptions in Subsections (1)(a)(xi), (xii), and (xiii) do not apply to proceeds and avails of any matured or unmatured life insurance contract assigned or pledged as collateral for repayment of a loan or other legal obligation.
(3) Exemptions under this section do not limit items that may be claimed as exempt under Section 78B-5-506.

78B-5-506. Value of exempt property — Exemption of implements, professional books, tools, and motor vehicle.

(1) An individual is entitled to exemption of the following property up to an aggregate value of items in each subsection of $500:

(a) sofas, chairs, and related furnishings reasonably necessary for one household;
(b) dining and kitchen tables and chairs reasonably necessary for one household;
(c) animals, books, and musical instruments, if reasonably held for the personal use of the individual or his dependents; and
(d) heirlooms or other items of particular sentimental value to the individual.

(2) An individual is entitled to an exemption, not exceeding $3,500 in aggregate value, of implements, professional books, or tools of his trade.
(3)

(a) As used in this Subsection (3), “motor vehicle” does not include any motor vehicle designed for or used primarily for recreational purposes, such as:

(i) an off-highway vehicle as defined in Section 41-22-2, except a motorcycle the individual regularly uses for daily transportation; or
(ii) a recreational vehicle as defined in Section 13-14-102, except a van the individual regularly uses for daily transportation.

(b) An individual is entitled to an exemption, not exceeding $2,500 in value, of one motor vehicle.

(4) This section does not affect property exempt under Section 78B-5-505.

31A-9-603. Exemption of fraternal benefits.
No money or other benefit, charity, relief, or aid to be paid, provided, or rendered by any domestic or nondomestic fraternal is liable to attachment, garnishment, or other process, or may be seized, taken, appropriated, or applied by any legal or equitable process or operation of law to pay a debt or liability of a member or beneficiary, or any other person who may have a right to them, either before or after their payment by the fraternal.

34A-2-422. Compensation exempt from execution — Transfer of payment rights.

(1) For purposes of this section:

(a) “Payment rights under workers’ compensation” means the right to receive compensation under this chapter or Chapter 3, Utah Occupational Disease Act, including the payment of a workers’ compensation claim, award, benefit, or settlement.
(b)

(i) Subject to Subsection (1)(b)(ii), “transfer” means:

(A) a sale;
(B) an assignment;
(C) a pledge;
(D) an hypothecation; or
(E) other form of encumbrance or alienation for consideration.

(ii) “Transfer” does not include the creation or perfection of a security interest in a right to receive a payment under a blanket security agreement entered into with an insured depository institution, in the absence of any action to:

(A) redirect the payments to:

(I) the insured depository institution; or
(II) an agent or successor in interest to the insured depository institution; or

(B) otherwise enforce a blanket security interest against the payment rights.

(2) Compensation before payment:

(a) is exempt from:

(i) all claims of creditors; and
(ii) attachment or execution; and

(b) shall be paid only to employees or their dependents, except as provided in Sections 26-19-5 and 34A-2-417.

(3)

(a) Subject to Subsection (3)(b), beginning April 30, 2007, a person may not:

(i) transfer payment rights under workers’ compensation; or
(ii) accept or take any action to provide for a transfer of payment rights under workers’ compensation.

(b) A person may take an action prohibited under Subsection (3)(a) if the commission approves the transfer of payment rights under workers’ compensation:

(i) before the transfer of payment rights under workers’ compensation takes effect; and
(ii) upon a determination by the commission that:

(A) the person transferring the payment rights under workers’ compensation received before executing an agreement to transfer those payment rights:

(I) adequate notice that the transaction involving the transfer of payment rights under workers’ compensation involves the transfer of those payment rights; and
(II) an explanation of the financial consequences of and alternatives to the transfer of payment rights under workers’ compensation in sufficient detail that the person transferring the payment rights under workers’ compensation made an informed decision to transfer those payment rights; and

(B) the transfer of payment rights under workers’ compensation is in the best interest of the person transferring the payment rights under workers’ compensation taking into account the welfare and support of that person’s dependents.

(c) The approval by the commission of the transfer of a person’s payment rights under workers’ compensation is a full and final resolution of the person’s payment rights under workers’ compensation that are transferred:

(i) if the commission approves the transfer of the payment rights under workers’ compensation in accordance with Subsection (3)(b); and
(ii) once the person no longer has a right to appeal the decision in accordance with this title.
35A-3-112. Assistance not assignable — Exemption from execution, garnishment, bankruptcy, or insolvency proceedings.
Public assistance provided under this chapter is not assignable, at law or in equity, and none of the money paid or payable under this chapter is subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law.
39-1-47. Military property exempt from civil process.
All military property issued to or owned by members of the National Guard shall be exempt from all civil process.

49-11-612. Domestic relations order benefits — Nonassignability of benefits or payments — Exemption from legal process.

(1) As used in this section, “domestic relations order benefits” means:

(a) an allowance;
(b) a defined contribution account established under:

(i) Chapter 11, Part 8, Defined Contribution Plans;
(ii) Chapter 22, New Public Employees’ Tier II Contributory Retirement Act; or
(iii) Chapter 23, New Public Safety and Firefighter Tier II Contributory Retirement Act;

(c) a continuing monthly death benefit established under:

(i) Chapter 14, Part 5, Death Benefit;
(ii) Chapter 15, Part 5, Death Benefit;
(iii) Chapter 16, Part 5, Death Benefit;
(iv) Chapter 17, Part 5, Death Benefit;
(v) Chapter 18, Part 5, Death Benefit; or
(vi) Chapter 19, Part 5, Death Benefit;

(d) a death benefit provided under a group insurance policy under:

(i) Chapter 12, Part 5, Death Benefit;
(ii) Chapter 13, Part 5, Death Benefit;
(iii) Chapter 22, Part 5, Death Benefit; or
(iv) Chapter 23, Part 5, Death Benefit; or

(e) a refund of member contributions upon termination.

(2) Except as provided in Subsections (3), (4), and (5), the right of any member, retiree, participant, covered individual, or beneficiary to any retirement benefit, retirement payment, or any other retirement right accrued or accruing under this title and the assets of the funds created by this title are not subject to alienation or assignment by the member, retiree, participant, or their beneficiaries and are not subject to attachment, execution, garnishment, or any other legal or equitable process.
(3) The office may, upon the request of the retiree, deduct from the retiree’s allowance insurance premiums or other dues payable on behalf of the retiree, but only to those entities that have received the deductions prior to February 1, 2002.
(4)

(a) The office shall provide for the division of domestic relations order benefits with former spouses and family members under an order of a court of competent jurisdiction with respect to domestic relations matters on file with the office.
(b) The court order shall specify the manner in which the domestic relations order benefits shall be partitioned, whether as a fixed amount or as a percentage of the benefit.
(c) Domestic relations order benefits split under a domestic relations order are subject to the following:

(i) the amount to be paid or the period for which payments shall be made under the original domestic relations order may not be altered if the alteration affects the actuarial calculation of the allowance;
(ii) payments to an alternate payee shall begin at the time the member or beneficiary begins receiving payments; and
(iii) the alternate payee shall receive payments in the same form as allowances received by the member or beneficiary.

(d) A court order under this section may not be issued more than 12 months after the death of the member.

(5) In accordance with federal law, the board may deduct the required amount from any benefit, payment, or other right accrued or accruing to any member or beneficiary of a system, plan, or program under this title to offset any amount that member or beneficiary owes to a system, plan, or program administered by the board.
(6) The board shall make rules to implement this section.

Note: While this reference information is current as of October 2010, it may not reflect the most up-to-date exemption figures on official state of Utah bankruptcy court statutes.

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