When you are going through bankruptcy, you may be concerned about your ability to keep your property. This includes big ticket items such as your house, your car, and even your jewelry. Keeping your property is possible even if you file under Chapter 7. You just need to understand the laws surrounding your ability to keep your property under the Hawaii Bankruptcy Code. If you find you are unable to keep the property you want to keep under Chapter 7, you can always file under Chapter 13, which has looser restrictions in terms of your debt.
Keeping Property under Chapter 7
In order to keep your property under Chapter 7, you will need to prove the creditor will not receive any benefit from reclaiming your property. This is accomplished by looking at the total amount due on the property versus the amount the property is worth. Take your home for instance. If the home loan is still at $125,000 and the home itself is worth only $75,000, there is no point in taking the home, because it will not pay off the debt.
You will need to prove you did not do anything to devalue the property. If anything has been discovered in regards to your damaging the property just to be able to keep it, you could be subject to criminal proceedings. Make sure you are playing by the rules on this one.
Keeping the Property under Chapter 13
As mentioned above, keeping your property under Chapter 13 is a lot easier. This is because when you file under Chapter 13, you are not filing for liquidation, but for debt management. The current Hawaii bankruptcy laws stipulate your property will remain in your possession as long as you can come to a reasonable agreement between the debtor and the creditor about the repayment of the loan. The creditor is required to work with you in regards to how much you are going to pay, as well as the interest rate attached to the debt.
When you have filed under Chapter 13, you will need to stick to the arrangements made within the bankruptcy, or you stand to lose your property. Additionally, a bankruptcy agreement which is not kept has a very negative effect on your credit score. This is why it is so important to talk with your bankruptcy attorney about how much money you honestly make on a paycheck and all of your other debts.
The point of bankruptcy is to help you to manage your debts. Whether the solution is to eliminate the debts or to help you in repaying them, you are being given a financial solution to your burden. Make sure to discuss all your options with your bankruptcy attorney to come up with a solution which makes sense to what you need and what is going to make the most financial sense for your future. Sticking to the agreement will allow you to have the brightest financial future that allows you to keep your property.