How has Hawaii law on credit card debt changed? And what changes are on the horizon?
Hawaii Garnishment Laws
Hawaii prohibits the garnishment of unemployment benefits, Social Security disability income, Social Security retirement benefits and pension payments to civil employees. Hawaii does not permit the garnishment of life insurance proceeds or disability benefits.
The living expenses, dependent allowances and wage thresholds for bankruptcy filing changed in April of 2013. Contact a bankruptcy attorney to have your garnishments modified to reflect the higher cost of living allowances now in effect.
Statute of Limitations
Hawaii has a six year statute of limitations on almost every type of account, from an open ended account to debt covered by a written contract, which typically includes credit card debt. The statute of limitations is part of Hawaii Revised Statutes Section 657-1. The statute of limitations in Hawaii has not changed, but stronger consumer protection laws are in effect to prevent the re-aging of debt on one’s credit card in an effort to get around the statute of limitations.
Bankruptcy Filing Changes
Federal law limits garnishments to 25% of the debtor’s disposable income. However, the median income, cost of living and discretionary income calculations for a federal bankruptcy filing have all changed and went into effect in April of 2013. Hawaii also limits garnishments to the amount above which someone makes thirty times the minimum wage. If you live in Hawaii and are considering filing a federal bankruptcy petition, contact an attorney to determine whether or not you qualify for a liquidation bankruptcy or debt-repayment plan.
Changes on the Horizon
Hawaii is one of eighteen states considering banning surcharges on credit cards. While this would not affect outstanding credit card debt, it would be a relief to consumers still using the cards. The proposed changes would not affect insufficient fund fees, cash advance fees, late fees or over the limit fees.
The surcharge legislation is in addition to the Hawaii Attorney General David Louie suing several major credit card companies for selling products like payment protection plans and extended warranties. If his class action suit on behalf of credit card holders in Hawaii succeeds, those with credit card debt could see their balance reduced by the amount they were charged for ancillary services.