Proposed Law May Slow Rapid Rise Of Bankruptcy The dramatic increase of 1 3 1 percent in the number of estates filing for bankruptcy in Utah for the 1980 fiscal year may be eased by a new law to be proposed to the 1981 general gener-al session of the Utah Legislature. Legisla-ture. This was pointed out by Utah Foundation in a study of bankruptcy procedures in Utah. THK PRIVATE research organization noted that the Interim In-terim Judicial Study Committee Commit-tee of the Legislature will propose a revision to the law on exemptions from execution from legal proceedings. ' This proposed law would affect bankruptcy in Utah in two ways: 1. the proposal . would preempt most of the federal fed-eral bankruptcy exemption provisions, so that only Utah law would affect Utahns. and 2. the modernization of the current provisions would provide pro-vide a debtor with exemptions concurrent with exisiting values. BANKRUPTCY procedure is based on federal law and administered by federal courts. Exemptions from execution ex-ecution are the only area of state jurisdiction and are currently cur-rently open to a choice by the debtor of either the federal or the state exemptions. These exemptions are the money and property which legally cannot be taken away from a person during a bankruptcy or other legal procedure. Utah Foundation analysts report that a new federal bankruptcy bank-ruptcy law, which took effect at the beginning of the 1979-80 fiscal year, greatly increased the exemption provision. For example, under the federal law, a husband and wife filing jointly may keep well over $ 1 5,000 and pay their creditors nothing. UTAH RESIDENTS may choose from either the Utah exemptions or the more liberal federal exemptions. Many observers claim that the federal feder-al exemptions have contributed contri-buted to the great increase of filings. In addition to the general 131 percent in filings in Utah since the new federal law took effect, there have been even greater increases in certain types of filings. Business reorganization reor-ganization under Chapter 1 1 of the federal law are up 288 percent per-cent and personal rehabilitation rehabilita-tion plans underChapter 13 are up 662 percent, according to Utah's Bankruptcy Court, Utah Foundation reported. THE REPORT compares the provisions under the current cur-rent state and federal laws and the proposed revised Utah law. Foundation analysts point out that if the proposed state law on exemptions from execution were passed, most of the federal provisions would be preempted and replaced by more realistic state provisions. This change could lessen the number of bankruptcy filings. The proposal of the Interim Judicial Study Committee is designed to help restore the general intent of bankruptcy law to be equitable and fair to debtor and creditor alike. UTAH Foundation analysts say that there are many reasons given for the tremendous tremen-dous rise in bankruptcy in Utah during the past year. Divorce, Di-vorce, credit changes, the recession, re-cession, lawyer advertising, and the new federal law are all mentioned as reasons. The report points out that the two major reasons given for this rise in bankruptcy probably are: 1 . the current recession, re-cession, and 2. the new federal law. There is not much Utah can do about the nation's economic eco-nomic status. However, the Legislature of Utah can help halt the escalating effect of the new federal law in the state by forbidding the use of most federal fed-eral exemptions and replacing them with realistic state exemption ex-emption provisions.