Written by the Upsolve Team.
Updated September 30, 2020
If you’re facing an overwhelming wave of debt in Hawaii, worry is likely to plague and burden your life at every turn. Are you exhausted of the stress and anxiety from stretching to make mortgage payments, credit card payments, car payments, and other bills? Do not let the fear of financial detriment and harassing creditor calls keep you awake at night—it is time to break free. Want to know how? Get the peace of mind you deserve by filing bankruptcy in Honolulu. Hawaii has a high divorce rate of 16.9%, which is one of the reasons people consider bankruptcy. So, don’t worry, as you are not alone if you are concerned about your finances.
There are two types of bankruptcy you can file in Honolulu. Chapter 7 Bankruptcy in Honolulu, commonly known as “liquidation” or “straight bankruptcy,” clears the slate for a fresh start. It is usually sought by individuals with mounting debts who have no way to repay them. “Straight” bankruptcy in Hawaii allows you a great way to dischargea considerable amount of past-due financial obligations; however, there are some obligationsthat you must honor. On the other hand, Chapter 13 Hawaii bankruptcy restructures your debts, allowing you to easily catch up on past due payments in order to avoid repossession and foreclosure. By filing bankruptcy in Honolulu, you can stop wage garnishments, creditor harassment, and wipe out medical debt. Utilizing “exemptions”, most filers are able to keep all of their assets. The first important step when filing bankruptcy in Honolulu is to determine which type of bankruptcy suits you best.
There are plenty of myths, rumors, and misconceptions about bankruptcy, mainly because bad actors sometimes write incorrect and misleading information on the Internet to stop people from filing bankruptcy in Honolulu. Some people think that filing for bankruptcy makes them a bad citizen. This is not true as most people who file for bankruptcy are hardworking and honest folks who find it hard to sustain their daily life and fall victim to financial instability. Many people in Hawaii think that filing Chapter bankruptcy in Honolulu is a complicated process. This is another myth as most Hawaii bankruptcy cases are quite straightforward and you can get free legal help or file bankruptcy in Honolulu on your own!
Honolulu Bankruptcy Lawyers - Estimated Cost
Attorneys’ fees in Hawaii differ from case to case. The complexity of your Honolulu bankruptcy case can make a considerable difference in what you pay. If you decide to work with a Hawaii bankruptcy lawyer, their fees will usually make up the biggest chunk of your total bankruptcy costs. Many Hawaii bankruptcy lawyers charge a "flat" fee and offer a free consultation. The typical cost of a bankruptcy lawyer in Honolulu ranges from $1,199 to $1,500. If you are low on cash, you can file a Chapter 7 bankruptcy in Honolulu on your own as it is not mandatory to hire a bankruptcy lawyer.
How to File Bankruptcy in Honolulu, Hawaii for Free
As arranging money to hire a Honolulu bankruptcy lawyer can be difficult for many people, they want to know how to file bankruptcy in Honolulu for free. If you can’t hire a bankruptcy lawyer or want to save money, this City Guide will give you an overview of the Honolulu bankruptcy process so that you can get out of debt soon and resume a normal life.
Collect Your Honolulu Bankruptcy Documents
One of the crucial steps in filing bankruptcy in Honolulu is to know what documents you have to collect when you first start the Hawaii bankruptcy process. Having all your Honolulu bankruptcy documents in one place will make the process of completing everything much faster and smoother when you sit down to fill out all of the bankruptcy forms. You should locate documents, like your pay stubs and tax returns. If you plan to file a Chapter 7 bankruptcy in Honolulu, you will also need your credit report. You can start by getting your credit report from each of the three credit reporting agencies. Also, collect your bank statements as your bankruptcy Trustee will need them.
Take Credit Counseling
There are a number of steps for people to undertake when filing bankruptcy in Honolulu, and one of them is credit counseling. Credit counseling is mandatory for all people filing bankruptcy under chapters 7, 11, 12, and 13 of the US Bankruptcy Code. You can attend bankruptcy credit counseling in person, or it can be done over the internet and the phone. Different languages are also available if English is not your native language. You have to take this course from an approved provider in Hawaii as only they can issue a valid completion certificate that you have to file with the Hawaii Bankruptcy Court. DebtorCC is an approved credit counselor in Hawaii.
Complete the Bankruptcy Forms
Deciding whether or not to file Hawaii bankruptcy is a big decision. Once you have made the decision and completed your first counseling course, it’s time to move on next steps for filing bankruptcy in Honolulu, namely filling out the bankruptcy forms. You can easily get a set of all the bankruptcy forms you need to complete for a Chapter 7 bankruptcy in Honolulu directly from the Bankruptcy Court. It’s important to be diligent and careful in completing your bankruptcy forms, as you’re signing everything under penalty of perjury. Deliberately leaving out important information can disqualify you from obtaining a discharge.
Get Your Filing Fee
The next step in filing your Chapter 7 bankruptcy in Honolulu is dealing with the Court filing fee. You have to pay this fee in full by cash or money order. If you qualify for a filing fee waiver, you have to complete this application before heading to the Court to file your Hawaii bankruptcy. This will tell the Court clerk you are seeking a fee waiver, and you will not have to answer any questions about whether you brought the $335.If your application for waiver is denied, you still have the option to pay your filing fee in installments after filing bankruptcy in Honolulu.
Print Your Bankruptcy Forms
Once you’re ready to go to the Hawaii Bankruptcy Court to file your Chapter 7 bankruptcy in Honolulu, it is time to print and sign all your bankruptcy forms. If you’re working with a bankruptcy lawyer in Hawaii, they’ll schedule an appointment and go through all the Hawaii bankruptcy documents with you, and usually have them printed out and ready to go when you visit their office. While filing Chapter 7 bankruptcy in Honolulu is a legal proceeding, all bankruptcy forms should be printed on regular 8.5" x 11" paper. You should not use the legal-sized paper. Keep this in mind if you are filing ‘pro se’. If you don’t have a printer, you should go to a local print shop, like AlohaGraphics.
Go to Court to File Your Forms
Next, you will have to go to the Hawaii Bankruptcy Court to file your Chapter 7 bankruptcy paperwork with the Court clerk. The clerk will stamp and process all of your Honolulu bankruptcy documents. Please note the bankruptcy Court doesn’t validate parking, so before heading out, make sure you have a plan for where to park your car when you get there. The automatic stay will go into effect when you file your Honolulu bankruptcy paperwork. You can visit the Honolulu Bankruptcy Court to file your paperwork. Since the courthouse is actually located in Honolulu, it’s strongly recommended that you complete this step in person, instead of by mailing everything to the Court. As you will be entering a federal building expect some security when you get there.
Mail Documents to Your Trustee
A Honolulu bankruptcy Trustee is appointed in all Chapter 7 and Chapter 13 cases in Hawaii, but the Trustee’s role is more limited in Chapter 13 than in a Chapter 7 case. A Chapter 7 bankruptcy Trustee is responsible for representing the interests of your unsecured creditors. Everyone filing a Chapter 7 bankruptcy in Honolulu has a duty to cooperate with their bankruptcy Trustee. The good news is that in most Chapter 7 cases in Hawaii, no assets are liquidated. You’ll meet your Hawaii bankruptcy Trustee at the creditors’ meeting. After your Chapter 7 bankruptcy in Honolulu is filed, you will have to send your most recent federal income tax return and other documents, like pay stubs, to your Trustee.
Take Bankruptcy Course 2
Anyone filing Hawaii bankruptcy under chapter 7 or 13 must take an instructional debtor education course. Debtor education cannot be started before the Honolulu bankruptcy case has been filed. Some of the things you will get help with include budgeting, money management, and how to devise and stick to a financial plan that leads you to a brighter future. If the Bankruptcy Court doesn’t know you completed the debtor education course, it can close your bankruptcy case without granting you a discharge. This course must also be taken through one of the providers approved to offer it to people filing bankruptcy in Honolulu.
Attend Your 341 Meeting
Once you file your Chapter 7 bankruptcy in Honolulu, your bankruptcy estate is created. Also, the Bankruptcy Court will set the date of the meeting of creditors, also known as a 341 hearing. Note that this hearing is normally held 20 - 40 days after the date of the bankruptcy filing. Attendance at the 341 meeting is required, and failure to appear will likely result in your Honolulu bankruptcy case being dismissed. All your creditors will be notified of the meeting of creditors and that you filed for Hawaii bankruptcy. Your creditors or their counsel may ask you questions regarding the validity and nature of the debts at this meeting, but it is rare that this happens.
Dealing with Your Car
A lot of folks in Hawaii do not realize how many different options filing Chapter 7 bankruptcy in Honolulu offers them when it comes to dealing with their vehicle, which is great. Although you cannot simply return your vehicle to the lender to get out of your auto loan outside of Hawaii bankruptcy, you may surrender your car as part of your Honolulu bankruptcy case and get your financial responsibility on the loan discharged. Your second option when filing bankruptcy in Honolulu is to enter into a reaffirmation agreement with the car lender. If you have equity in the vehicle, because it’s worth more than what you still owe on it, make sure to claim the suitable exemption on your Schedule C for this purpose.
Hawaii Bankruptcy Means Test, Bankruptcy Forms, and Exemptions for Honolulu
Hawaii Means Test
The Hawaii bankruptcy Means Test is based on the bankruptcy law reforms enacted by Congress in 2005. Filing for Chapter 7 bankruptcy in Honolulu is an option available to folks who are struggling with debts they have no hope of ever paying back. As this option is available to individuals who live under a specific income threshold, people filing bankruptcy in Honolulu have to take the Hawaii bankruptcy Means Test. The Hawaii Bankruptcy Court will require detailed expense and income accounting and documentation to determine whether your petition for relief should be granted. Find out about the Chapter 7 income limits to make sure you are filing bankruptcy in Honolulu under the proper Chapter.
Median Income Levels for Hawaii
Hawaii Median Income Standards for Means Test for Cases Filed On or After May 1, 2020
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Poverty Levels for Hawaii
Hawaii Fee Waiver Eligibility for Cases Filed On or After May 1, 2020
Eligible for fee waiver when under 150% the poverty level.
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Hawaii Bankruptcy Forms
Everyone who files a Hawaii bankruptcy case has to use the official Hawaii bankruptcy forms. Although the federal bankruptcy forms make up the most the paperwork that will be the same throughout the country, note that the local Hawaii bankruptcy forms are also necessary. This is why you should make certain you’re completing everything when filing bankruptcy in Honolulu. You may access all the Hawaii Chapter 7 forms needed to file your Honolulu bankruptcy case in the filing packet available on the Bankruptcy Court's website. The first Hawaii bankruptcy form you will have to file is the Voluntary Petitionfor bankruptcy.
The stereotypical perception of Hawaii bankruptcy is that you will lose everything you own to creditors. But, this perception is misleading. With Hawaii bankruptcy exemptions, you can keep a certain amount of property (called assets) by exempting it. You can choose between the federal bankruptcy exemptions or the Hawaii bankruptcy exemptions. While the specifics may vary depending on the circumstances, usually the federal bankruptcy exemptions are more favorable. If you strategically utilize Hawaii bankruptcy exemptions, you may be able to keep most of your valued possessions.