What happens to my assets during a Chapter 11 bankruptcy?

If you file for Chapter 11 bankruptcy in Utah, your assets are subject to an Automatic Stay. This is an injunction that stops certain kinds of action against you, including collection activity. An example would be that creditors must stop calling you for payments on the debt that you owe. Once you file for Chapter 11, your assets become property of the bankruptcy estate. This means that the court will have control of the assets, which can then be used to pay creditors. Typically, you can keep your assets, but the court may order you to turn them over for liquidation. You will have to work with a court-appointed trustee as you create a repayment plan. This plan must be accepted by the court, and it will require the trustee to liquidate any non-exempt assets. It could also include trading assets for less debt or using some of the assets to pay creditors. After the court approves your plan, you will be discharged from your debts and can begin to rebuild your credit. Your assets will also become yours once again. However, it is important to remember that you will still be responsible for any debt not eliminated in the bankruptcy.

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