Utah Chapter 7 Bankruptcy FAQ
What happens to the money in my bank account when I file Chapter 7?
Any money in your possession or bank account on the day your case is filed — including a tax refund due or coming due — becomes property of the bankruptcy trustee. It is not yours. The right approach is to spend that money before filing on regular monthly necessities: rent or house payment, utilities, food, and clothing — and keep receipts showing how you spent it. Do not simply pull the money out and hold cash, buy gift cards, or write checks that haven’t cleared (“pending” doesn’t count). If you pay a bill with a money order, actually mail it before filing. And never use the money to pay back family or friends — that creates a separate problem the trustee can unwind.
What happens to my tax refund in Chapter 7?
A tax refund belongs to your bankruptcy estate to the extent it comes from income you earned before filing. If you file partway through the year, the trustee can claim the pre-filing share of that year’s refund — even though you won’t receive it until the following spring. If you already received and spent a refund before filing, be prepared to show the trustee how you spent it. Don’t take a refund anticipation loan, and don’t pay tax-prep fees out of the refund, or you’ll have to reimburse the trustee for the shortage. Never cash a tax refund check received during the bankruptcy without talking to your attorney first.
What happens if I miss the meeting of creditors (341 meeting)?
Your case will be dismissed. Re-filing requires a new court filing fee and an additional attorney fee. The good news: the meeting is held by Zoom now — no courtroom, no hearing room — and your ID and Social Security verification are handled through a secure upload beforehand. There is no substitute for attending, but attending is as easy as joining a video call.
Why did my online bill pay stop working after I filed?
Creditors often shut down portal access when you file so they can’t be accused of taking money from someone under bankruptcy protection. The fix is simple: use your own bank’s bill-pay system to “push” the payment instead of having the creditor “pull” it.
Can I contact the bankruptcy trustee directly?
Don’t. The trustee is not your advocate — the trustee’s job is to find assets for creditors, and direct contact almost always does more harm than good. If something needs to reach the trustee, route it through your attorney’s office.
What if I forgot to list a creditor?
Creditors can be added after filing by amendment. At our firm that’s a $100 flat charge per amendment — the same whether it adds one creditor or several — and it includes the court’s amendment fee.
How do I keep my car or home in Chapter 7?
By signing a reaffirmation agreement with that creditor. Tell your attorney which debts you want to keep; the agreement comes from the creditor and often only after you contact your lender directly. Some creditors won’t reaffirm a delinquent loan, some charge a fee to prepare the agreement, and some won’t send one at all — and may repossess even though you wanted to keep the property, so involve your attorney the moment a creditor sends you anything. One trap for homeowners: if you don’t sign a reaffirmation agreement with your mortgage company, they may stop reporting your payments to the credit bureaus, which can make refinancing harder later.
What is a cross-collateralization clause?
Language in loan documents — common at credit unions — that groups all of your debts at that institution (credit cards, lines of credit) on top of your secured debt, like a car loan. The result: to keep your car, you may owe more on it than you thought. If you bank where you borrow, ask whether your loans are cross-collateralized and discuss it with your attorney.
What happens to secured property I don’t reaffirm?
A secured debt is one where you pledged property as collateral. If you don’t reaffirm with the creditor before the end of the case, you can lose the collateral, and the creditor may contact you to arrange pick-up of surrendered property.
Are co-signers protected by my bankruptcy?
No. A Chapter 7 discharge protects you, not your co-signer. The debt must still be paid on time or your co-signer’s credit will suffer and collection efforts against them will continue.
Can I use my credit cards after filing?
No. After filing you may not use any existing open credit lines — credit cards, home-equity lines, or bank overdrafts.
Will bankruptcy clean up my credit report?
Not automatically. Creditors are supposed to notify the bureaus that your debts were discharged — and they frequently fail to. Correcting your report afterward is done by disputing inaccuracies directly with the credit bureaus, and that follow-through falls on you, not the court.
What happens to my utilities?
You can include utility debts in your bankruptcy, but the utility can require a deposit within about twenty days after you file to keep service going.
Which debts survive a Chapter 7 discharge?
The usual survivors: secured loans and lease-to-own contracts (if you keep the property), most tax obligations, alimony and child support, debts from fraud, and fines and criminal penalties. Student loans have historically survived too — but a separate discharge proceeding is now available, so ask whether you qualify. Also: recent borrowing gets scrutiny. A creditor may object to discharging credit card charges, cash advances, or payday loans taken shortly before filing — especially larger purchases of non-necessities — so tell your attorney about any recent charges. And some income tax debts can be discharged if the returns were due more than three years before filing; if a tax year is close to qualifying, it may be worth delaying your filing — ask.
Should I open a new bank account before filing?
Usually yes — at a bank you don’t owe money to. If you bank where you owe, the money in your account can be frozen as security and the account closed. Stop payment on undeposited checks, cancel scheduled auto-payments, and switch your direct deposit to the new account. Bankruptcy doesn’t stop a creditor from depositing a check you already wrote, and automatic withdrawals take time to shut off — a brand-new account at a different bank is the clean solution.
How long does it take to get garnished money back?
Allow at least two weeks after filing to recover funds garnished after your bankruptcy — the refund check takes time to arrive. Don’t budget around that money arriving quickly.
What is the financial management course — didn’t I already do that?
No — there are two courses. The brief online counseling session you took before filing is the first. To receive your discharge you must also complete a second, post-filing financial management course. If the certificate isn’t filed by the deadline, your case closes without a discharge and creditors can resume collecting. You’ll get a pile of mail offering this second course at inflated prices — ignore it and take the second course through the same provider and login you used for the first.
I got a scary “deficiency notice” from the court. Is my case being dismissed?
Almost certainly not. A deficiency notice is routine when a case is opened with initial documents only — it just means the remaining schedules are due, and there’s a window to file them. Your attorney receives copies of everything the bankruptcy court mails you. What matters on your end: sign the after-filing agreement and return every document your attorney sends within days, because the court’s deadlines are short.
Can a bank or doctor refuse to serve me after I discharge their debt?
Yes. Anyone whose debt you discharge has the right to stop offering you services, so plan on finding another provider.
Is it hard to rent an apartment during an open Chapter 7?
Often, yes. Landlords see the open case on your credit report and worry you’ll add the rent to it. Plan to stay put until the case closes — or if you must move, save up to offer a substantially larger deposit than competing tenants. Money talks.
Have a question that isn’t here?
That’s what the free consultation is for — and with true $0 down, getting answers costs nothing. Call or text (801) 388-0007.