If you have found your financial situation going from bad to worse despite your best efforts, it may be time to consider filing bankruptcy in Hawaii. Contrary to old wives tales, most people do not fall into debt because they are irresponsible. There are other events can pull you down into insolvency:
- If you are laid off, fired, or if your workplace goes out of business, you may find it difficult to either find another position or find one that pays the equivalent of your former salary.
- Illness or injury can prevent you from working, and a permanent disability will prevent you from ever working again.
- Uncovered medical expenses, even if you have insurance, can be so overwhelming that you may be forced to declare bankruptcy.
Two Kinds of Bankruptcy
There are two options you can choose when filing bankruptcy in Hawaii – Chapter 7 Bankruptcy and Chapter 13 Bankruptcy. Both offer certain advantages or disadvantages, and you should take these into consideration before filing for bankruptcy.
Chapter 7 Bankruptcy might be considered the ‘clean slate’ option. When you file for Chapter 7, most of your debts will be immediately wiped out and calls from collection agencies or lawyers will cease. You may well be wondering if you will be able to keep your home if you file for Chapter 7, and you will be able to if you are not behind on your mortgage payments.
- Any garnishment of your wages will cease immediately, and no further garnishments will be taken against your earnings.
- You will also be able to leave this trouble completely behind you within 6 months; this is the maximum length of time for the proceedings to be finished.
If you are behind on your mortgage or car payments, you may well consider that Chapter 13 Bankruptcy will serve you better. Under Chapter 13 protection you will be furnished with a repayment plan of 3 to 5 years, and this will allow you to keep your home – you will be able to set up a new payment schedule with the lending institution.
- Chapter 13 does not remove your debts, but will reduce the payments in accordance with your income.
- Your credit rating will improve if the terms of your payment schedule are met.
- Calls from collections agencies and garnishment of your wages will cease.
Use a Lawyer or Go It Alone?
While it is certainly possible for you to file for bankruptcy yourself, perhaps it’s best to remember the old adage “The man who acts as his own lawyer has a fool for a client”. It is not likely that even the most intelligent man or woman who has not been trained in law will be able to handle a bankruptcy as well as an attorney who specializes in this area of jurisprudence. An experienced lawyer will be able to navigate you through the complicated shoals of bankruptcy law and help your arrive at the best solution for you and your family.