Best Bankruptcy Lawyers in Hawaii

About Bankruptcy Law in Hawaii, United States

Bankruptcy is a legal process designed to help individuals and businesses eliminate or repay their debts under the protection of the federal bankruptcy court. In Hawaii, bankruptcy cases are governed by federal law and handled by the U.S. Bankruptcy Court for the District of Hawaii, located in Honolulu. Bankruptcy can offer a financial fresh start, stop collection efforts, prevent foreclosures, and provide a structured path to manage overwhelming debts. While the process is federally regulated, Hawaii residents still encounter specific state guidelines and exemptions that affect how bankruptcy affects their finances and property.

Why You May Need a Lawyer

Bankruptcy law is complex and the consequences of filing are significant. Here are common situations where seeking help from a bankruptcy attorney is recommended:

• You are unable to pay your debts and are being harassed by creditors.
• You are facing foreclosure on your home or repossession of your car.
• You need advice on whether to file for Chapter 7 (liquidation) or Chapter 13 (repayment plan) bankruptcy.
• You are unsure about which assets and property you can keep under Hawaii exemptions.
• Your income, assets, or debts are complicated, or you have filed for bankruptcy before.
• You want to stop wage garnishments or lawsuits by creditors.

Lawyers provide guidance through every step, help you avoid mistakes, and represent your interests in court hearings.

Local Laws Overview

While the bankruptcy process is guided by federal statutes, Hawaii law plays a crucial role in the bankruptcy process, particularly regarding property exemptions. Here are some key aspects:

• Bankruptcy Court Location: All bankruptcy cases for Hawaii are filed in the Honolulu federal bankruptcy court.
• State Exemptions: Hawaii offers specific exemptions that allow you to protect certain types of property during bankruptcy, such as your home up to a certain equity amount, personal belongings, retirement accounts, public benefits, and more.
• Means Test: An income-based test determines eligibility for Chapter 7 filings. The median income levels and allowable expenses are calculated based on Hawaii's cost of living.
• Credit Counseling Requirement: You must complete a government-approved credit counseling course before filing and a financial management course after filing to receive a discharge of debts.
• Hawaii Homestead Exemption: Hawaii law allows you to protect up to $25,000 in equity in your residence, or $30,000 if you are over 65, subject to qualifications.
• Community Property Rules: Hawaii follows a modified community property concept. Consult a local attorney about assets held jointly with a spouse.

Understanding these local rules is vital to safeguard your assets and maximize your options.

Frequently Asked Questions

What types of bankruptcy can individuals file in Hawaii?

Most individuals file under Chapter 7 or Chapter 13 of the United States Bankruptcy Code. Chapter 7 involves liquidating non-exempt assets to pay creditors, while Chapter 13 creates a repayment plan to pay back all or part of your debts over three to five years.

Do I have to give up all of my property if I file for bankruptcy in Hawaii?

No. Hawaii bankruptcy exemptions, as well as federal exemptions in some cases, allow you to protect certain categories of property, such as a portion of home equity, personal belongings, retirement accounts, and necessary household goods.

What are the income eligibility requirements for Chapter 7 bankruptcy in Hawaii?

You must pass the means test to qualify for Chapter 7. This test compares your average household income over the past six months to Hawaii's median income for a similar household size. If you exceed the limit, you may be required to file for Chapter 13 instead.

Will bankruptcy stop foreclosure on my home?

Filing for bankruptcy creates an automatic stay, which temporarily halts foreclosure proceedings and other collection activities. In Chapter 13, you may be able to catch up on overdue mortgage payments through a payment plan.

How will bankruptcy affect my credit?

Bankruptcy will negatively impact your credit score. Chapter 7 bankruptcies remain on your credit report for up to 10 years, and Chapter 13 remains for up to seven years. However, many people are able to begin rebuilding their credit soon after bankruptcy.

Can I discharge all my debts through bankruptcy?

Not all debts are dischargeable. Common non-dischargeable debts include most taxes, student loans, alimony, child support, and certain court-ordered payments. Discuss your specific debts with a bankruptcy attorney.

How much does it cost to file for bankruptcy in Hawaii?

Court filing fees for Chapter 7 and Chapter 13 are set by the federal courts. There may be additional costs for credit counseling, financial management courses, and attorney fees depending on your case complexity.

Do both spouses have to file for bankruptcy together?

No, but both spouses may file jointly if both are liable for significant debts. Filing jointly can have advantages and disadvantages depending on your assets and debts, so seek legal guidance based on your situation.

Will my employer or landlord find out if I file for bankruptcy?

Bankruptcy filings are public records, but in general, employers or landlords will not be notified unless they are creditors or you owe them money. However, background checks might reveal a bankruptcy filing.

Can I keep my car if I file for bankruptcy in Hawaii?

It depends on the equity in your car and the applicable exemption amounts. Many filers are able to retain their vehicle, especially if they are current on payments and the equity does not exceed Hawaii exemption limits.

Additional Resources

• U.S. Bankruptcy Court - District of Hawaii: The official source for local bankruptcy forms, procedures, and court calendars.
• Legal Aid Society of Hawaii: Provides free or low-cost legal help to qualifying Hawaii residents facing debt issues.
• Hawaii State Bar Association - Lawyer Referral and Information Service: Connects individuals with experienced bankruptcy attorneys.
• Consumer Credit Counseling Services of Hawaii: Offers credit counseling, financial education, and debt management services.
• Hawaii Department of Commerce and Consumer Affairs (DCCA): Offers information about consumer protection and financial issues.

Next Steps

If you are struggling with debt and considering bankruptcy in Hawaii, here are steps you can take to get started:

1. Gather a list of all your current debts, assets, sources of income, and recent financial transactions.
2. Contact a reputable bankruptcy attorney or the Legal Aid Society for a consultation. Many attorneys offer free or low-cost initial meetings to discuss your options.
3. Consider completing a government-approved credit counseling session, which is required before filing.
4. Review and discuss all available options with your attorney, including possible alternatives to bankruptcy if applicable.
5. Prepare the necessary documents for filing, with your lawyer’s guidance.
6. Stay informed about mandatory court dates, hearings, and any required participation in courses.

Taking the first step toward addressing debt can be stressful, but getting informed legal advice ensures that your rights are protected and increases the chance of a successful financial recovery.