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Bankruptcy doesn't need to be thought of in a negative light. The act of filing for bankruptcy was intended to give people facing financial challenges the opportunity to begin again with a clean slate. If you've been considering the possibility of filing for bankruptcy in Hawaii, it might just be the solution you've been looking for. This page shows you How to File for Hawaii Bankruptcy.
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Introduction
Bankruptcy filings always take place in federal court because bankruptcy falls under the jurisdiction of federal law in all 50 states across the USA. However, state law can play a role at certain points along the process. For example, it may decide what assets are protected from forced liquidation. -
Step 1: What is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy is a legal proceeding in the United States designed to free an individual facing significant financial pressure from their unsecured creditors. However, Chapter 7 does not eliminate debt backed by collateral like a mortgages on a house or car payments. This type of bankruptcy, as opposed to Chapter 13, is sometimes called a liquidation or straight bankruptcy. Some people become nervous about the thought of filing for chapter 7 due to tales of asset liquidation, but forced sales can in a lot of cases be avoided if you are able to pass the means test covered in Step 2. Regardless of whether or not a Chapter 7 bankruptcy works for you though, it's also worth considering a Chapter 13 restructuring instead. You'll need to weigh your options to decide what's right for you. -
Step 2: The Chapter 7 Income Test
In order to pass the Chapter 7 Bankruptcy means test and be allowed to declare Chapter 7 bankruptcy, you'll need to demonstrate that your annual income is at or below the state median in Hawaii. This figure is released by the Census Bureau, but fortunately, itvaries depending on the size of your household. The following maximum incomes apply in cases filed after March 15, 2009http://research.lawyers.com/Hawaii/Bankruptcy-in-Hawaii.html:- Single individual: $52,784
- Two person family: $66,227
- Three person family: $73,187
- Four person family: $88,863
- Five+ person family: $88,863 plus $6,900 for each extra individual over four
Step 3: Chapter 7 Exemptions in Hawaii
Once you have confirmed that you are free to declare chapter 7 bankruptcy, you'll need to talk to a bankruptcy attorney about the exemptions that you have a right to claim. In fact, in Hawaii you can choose between two different "exemptions schemes", one based on federal law and the other on state law. You simply get to pick the one that better suits your circumstances. However, note that married couples may double the exemptions for the federal plan only. Though the attorney will have the experience necessary to come up with the best strategy for you, here are a just a few of the allowable exemptions in Hawaii from each scheme:http://research.lawyers.com/Hawaii/Bankruptcy-in-Hawaii.html- Your motor vehicle to $3,225 - doubled for married couples
- ERISA-qualified benefits deposited over three years prior to filing for bankruptcy
- Unmatured life insurance contract, except credit insurance policy
- Tools, implements, instruments, uniforms, furnishings, books, equipment, one commercial fishing boat and nets, one motor vehicle and other personal property needed for livelihood
- Alimony, child support needed for support
- Household furnishings and appliances, books, clothing, jewelry and watches to $1,000
- Property of business partnership
- $550 per item in any household goods up to a total of $10,775 - doubled for married couples
- Real property interest to $30,000 if head of family or 65 years of age or older, otherwise to $20,000, limited to one acre
- Burial plot to 250 square feet plus tombstones, monuments and fencing on site
Resources Powered by Google
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Bankruptcy in Hawaii - Lawyers.com
The process of filing bankruptcy in Hawaii, including information on exempt property and non-dischargeable debtsresearch.lawyers.com -
U.S. Bankruptcy Court, District of Hawaii
U.S. Bankruptcy Court, District of Hawaiihib.uscourts.gov
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