Utah Debt Help

Being overburdened with debts like credit card and medical bills can feel scary, but Utah residents can take advantage of several types of legal help when in financial trouble. No matter how serious the financial situation, most people can qualify for some type of bankruptcy relief or partially repay debts through credit counseling, according to the Utah State Bar.

Statute of Limitations

Under Utah statute 78-12-25, you cannot be sued for credit card or bank loan debts that happened more than four years ago. A debt collector can still pursue payment but not through the court system. If a creditor sues you for an old debt, then attend court and inform the judge that the company has violated state law 78-12-25.

Debt Collection Basics

Collection agencies representing a credit card company or similar lending institution can legally contact you to pursue payment of overdue debts, according to the Utah Division of Consumer Protection. All collection agencies contacting state residents must be registered and bonded with the Utah Division of Corporations and Commercial Code. Because most debt collection laws are federal, the Federal Trade Commission is the best agency to contact if you feel a bill collector has threatened you or otherwise violated your legal rights. In extreme cases, you may opt to hire a qualified attorney to assist you.

Chapter 7 Bankruptcy

Some Utah residents need to file Chapter 7 bankruptcy to receive debt help, according to the book "How to File for Chapter 7 Bankruptcy." This legal option allows permanent forgiveness of approved, pre-existing obligations like credit card and medical bills. Utah residents must earn less than the annual median income level for their household size in order to automatically qualify to file Chapter 7. As of 2011, the figure for a single resident was $50,568, while the level for a family of four was $69,990, according to the U.S. Trustee Program. People who earn more must prove through a federally derived means testing formula that they cannot even partially repay debts while supporting their dependents or file for Chapter 13.

Chapter 13 Bankruptcy

Working people may opt to partially repay their debts under court supervision in Chapter 13 bankruptcy, notes the Utah State Bar. These repayment plans last three to five years and enable state residents to retain more of their personal assets. But one drawback is that someone under a Chapter 13 payment plan cannot legally get new credit without court permission while repaying debts, warns the book "How to File for Chapter 7 Bankruptcy."