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Filing Bankruptcy in Hawaii

Bankruptcy involves both state and federal laws. Federal law creates the broad rules, requirements and restrictions for debtors. State law sets forth the exemptions that a debtor can use. State exemptions vary from state the state. The exemptions have an important role in determining how much property you will be able to keep if you file a Chapter 7, and how much your creditors will need to be payed in you file Chapter 13.

Hawaii Bankruptcy Options

If you decide to file for Chapter 7 or Chapter 13 in Hawaii, you will be required to complete a credit counseling course. The United States Trustee’s office must approve of the agency you complete your course with. A list of approved agencies can be found here: http://www.justice.gov/ust/eo/bapcpa/ccde/CC_Files/CC_Approved_Agencies_HTML/cc_hawaii/cc_hawaii.htm

Where to File Bankruptcy in Hawaii

The Bankruptcy Court in Hawaii is located in Honolulu. The Hawaii Bankruptcy Court’s website is: http://www.hib.uscourts.gov/  The website provides information on location, local rules, forms and more.

Get a Hawaii Bankruptcy Lawyer

Because each state has its own property exemptions, it’s important to get a local Hawaii bankruptcy attorney. Some states are more generous than others. In Hawaii, a bankruptcy lawyer can help debtors to either use the state provided exemptions or the federal exemptions. We recommend that you discuss your exemptions options with an attorney to determine which exemptions are most beneficial and will allow you keep all or most of your property. You cannot use both federal and state exemptions. You may fill out the form at the right to get a confidential consultation with an attorney in Hawaii who will guide you through the process. It’s better to get a lawyer now, than to wish you had used one later. A bankruptcy lawyer who is experienced will show you the ropes and help you avoid losing any assets which you may legally keep even after bankruptcy.

Hawaii Property Exemptions for Bankruptcy

In Hawaii, if you choose to use the state exemptions you can protect $20,000 of equity in your homestead (property where you reside). If you are the head of household or older than 65 you can exempt $30,000. You can exempt $2,575 worth of equity in a vehicle. Equity is the value of the vehicle or home, minus any obligations on the vehicle or home. Obligations include mortgages, IRS liens, auto loans, auto title loans and domestic support liens. Hawaii also has an unlimited exemptions for tools of the trade. Tools of the trade include any tools used in your profession (eg. fishing boat and nets). This unlimited exemption can be extremely beneficial for the self employed of small business owners of Hawaii.

Who can file for bankruptcy in Hawaii?

Bankruptcy relief in Hawaii is available to all persons who either reside in, own real property in, or own a business which operates in the state of Hawaii.  In order to be eligible for this relief, a person must not have filed for bankruptcy in any state within the past 6 years.  The petitioner must also be willing to honestly disclose all of their financial information including their debts and assets.

How do I know if I am eligible for Chapter 7 bankruptcy?

According to the bankruptcy abuse prevention and consumer protection act of 2005, a means test must be applied in order to determine a petitioners eligibility for Chapter 7 bankruptcy relief.  This means test works by comparing your total income from the previous year to the average income in the state of Hawaii for that same time period.  Only people whose income falls below that average income will be eligible to receive Chapter 7 bankruptcy relief.

If I file for bankruptcy will my spouse be effected as a result?

Since Hawaii is not a community property state, it is not required that you file bankruptcy with your spouse.  If you choose to proceed with your bankruptcy case without listing your spouse on the petition, your spouse will not be effected by your decision to file bankruptcy.  While your spouse will not be effected by this decision, you should also be aware that your spouse will still be responsible for paying any joint debts which you may have accumulated.

What are Hawaii property exemption laws?

Hawaii’s property exemption rules are as follows:

  • Homestead exemption of up to $30,000 in real estate
  • Motor Vehicle of up to $2,575
  • 100% of all necessary household furnishings and apparel
  • Non essential personal items of up to $1,000
  • 100% of all books and tools used in your trade or profession

What do I need to do before I can file for bankruptcy?

Prior to filing for bankruptcy in the state of Hawaii, it is recommended that you retain the counsel of an experienced bankruptcy attorney.  The law also requires that you attend an approved credit counseling course prior to filing for bankruptcy.

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