When filing for bankruptcy, there are a lot of questions you may have. One of the biggest questions that people have is in regards to their property. You do not want to give up things like your home or your car if you can avoid it. However, there are some circumstances in which this is completely unavoidable. Take your time when going through bankruptcy proceedings to make sure you are choosing the right bankruptcy for you and that you are keeping the property that is important to you. Here, you will discover what you can and cannot keep when filing for Chapter 7 or Chapter 13 under Hawaii bankruptcy laws.
Chapter 7 Bankruptcy Property Laws
Chapter 7 is not the best bankruptcy for anyone looking to keep their property, because it is known as liquidation. However, there are provisions under Hawaii bankruptcy law which allows you to keep property through the use of exemptions. The way this works is the court will consider how much you have invested into the property as well as what the property is worth now. Keep in mind that the value is not what you purchased the property for, but what it is estimated as being worth now. If you have invested $10,000 into a property that is now considered to be worth $50,000, you will likely not be able to keep the property. This is because the bank can resell the property and get their investment back.
Chapter 13 Bankruptcy Laws
If you plan on keeping your property, the better plan is to file Chapter 13. You are given protection for your property as long as you can work out a payment plan with the creditor. Keep in mind that if you are behind on payments for your car or your home, you do not have to lose them. Bankruptcy laws protect you from losing your home and can even help you to get your car back if it has been repossessed. The sooner you file, the easier it will be to get protection and to keep your property.