Although each state has its own exemptions, federal law is the basic guideline for filing for Hawaii bankruptcy or in any other state. The process is nearly the same in each state, but every state has resources that may be different from those offered in other states. State laws can also determine what property you may get to keep and how much you will have to repay to your creditors. Some of the rules in Hawaii are listed below.
Mandatory Credit Counseling
When you are considering filing for bankruptcy in Hawaii, be aware that you will be required to attend mandatory credit counseling before you can file your paperwork. The agency that you choose to work with must be one that has been approved by the federal government so be sure to ask before completing your counseling.
Where to File
In Hawaii, you must file all bankruptcy paperwork in Honolulu. The bankruptcy court has a website with all of the forms and information you will need to provide to start your bankruptcy proceedings.
In Hawaii, people who file for bankruptcy are allowed to choose whether they want to follow the state’s property exemptions list or the one from the federal government. However, once the decision is made, it cannot be changed and you cannot choose part from one and part from the other. If you are married, you and your spouse can claim the full amount of the exemptions.
You may keep certain personal property, such as a vehicle whose value is under a certain amount, clothing, furniture and appliances. Some jewelry and watches may be kept, as long as they are worth less than $1,000.
If you are the head of your family, you may keep up to $30,000 in the equity of your home, but only $20,000 in other circumstances. The property must be less than one acre and spouses cannot both claim that amount.
Certain pensions and benefits are exempt from bankruptcy proceedings, such as unemployment and disability payments. Insurance plans may also be exempt and you may keep all the tools you may own to perform your job.
Circumstances may change what exemptions you may be allowed to claim, so be sure to talk to your financial advisor about what to expect when you file your paperwork.
Before you can file for bankruptcy, you will have to compare your income to the average incomes from around the state for the same size family. Whether you will be eligible to file for Chapter 7 or Chapter 13 will depend on where you fall in this average. If your income is less than the state average, you can file for Chapter 7 and will be able to set up a three year payment plan under a Chapter 13, instead of a five year plan.
Hawaii requires all people who file for bankruptcy to attend a debtor education course. It is different than the credit counseling that you have to attend before you file, but still must be taken with an agency that has been approved by the federal government.
Bankruptcy information can be very confusing. It can be a very good idea to find a lawyer you can trust to help you through the long process to be sure that you do everything you need to do to regain your financial freedom.