Written by the Upsolve Team.
Updated September 29, 2020
Despite what you may often see on the news, bankruptcy is not just for movie stars and athletes. Actually, thousands of Americans around the country file for bankruptcy protection every year, including folks here in Hawaii. This is because, for many people, Hawaii bankruptcy is the best way to relieve debt and restore financial stability. If you are struggling to repay your debts and creditors are harassing you, filing bankruptcy in Lihue can be a step in the right direction to get the peace of mind you deserve.
You can seek bankruptcy protection, either under Chapter 7 or Chapter 13. Also called debt liquidation, filing Chapter 7 bankruptcy in Lihue will allow you to eliminate all of your dischargeable debtswithin a matter of months. These debts include medical bills and credit card debt. Chapter 7 bankruptcy is ideal for people with little or no disposable income. With a Chapter 7 bankruptcy, you don’t need to have a certain amount of debt as your ability to make ends meet every month is what really matters. Under Chapter 13 bankruptcy, you will prepare a repayment plan and submit it to the Court for approval. People usually file for Chapter 13 bankruptcy protection in Hawaii based on equityin real estate or higher income qualifications. Many individuals believe incorrectly that filing bankruptcy under Chapter 13 is their only option if they own a home. However, you can protect your home and car by filing Chapter 7, as long as you’re current on your mortgage. You should first determine which type of Hawaii bankruptcy suits you best.
Unfortunately, the bankruptcy process is the subject of many misconceptions and myths that can be discouraging for people considering filing bankruptcy in Lihue. Many people think that if they file for bankruptcy, their home will be sold in order to cover the debt. This is not true as in most cases, you’ll be able to keep your residential home. In Chapter 7 bankruptcy proceedings, your home is a common exemption. Many people in Hawaii think that filing Chapter 7 bankruptcy in Lihue is a complicated process and they need an attorney. This is just another myth as most bankruptcy cases are very straightforward and you can get free legal help or file bankruptcy in Lihue on your own!
Lihue Bankruptcy Lawyers - Estimated Cost
If you are thinking about hiring a bankruptcy lawyer to file your bankruptcy and represent you, you will need to pay attorneys’ fees. Many bankruptcy lawyers charge a flat fee, especially for a simple bankruptcy and almost all offer a free consultation. The typical cost of a bankruptcy lawyer in Lihue ranges from $1,199 to $1,500. If you can’t arrange the cash, you can file Chapter 7 bankruptcy in Lihue on your own as it is not mandatory to hire a bankruptcy lawyer. You can save the money and use it to pay your filing fee. All you have to do is follow some simple instructions.
How to File Bankruptcy in Lihue, Hawaii for Free
Many cash-strapped people in Hawaii may not be able to afford to file for bankruptcy. If you are finding it hard to afford the high fees charged by Hawaii bankruptcy attorneys for filing Chapter 7 bankruptcy in Lihue, you may want to know how to file bankruptcy in Lihue for free. As there is no rule in Hawaii that requires you to use a bankruptcy lawyer to file your petition, you may do the filing yourself, especially if your case is simple. Plus, this City Guide can be helpful in getting bankruptcy relief.
Collect Your Lihue Bankruptcy Documents
As you’re preparing to file your Chapter 7 bankruptcy in Lihue, you should collect all your Hawaii bankruptcy documents. These documents will be very useful in completing your Lihue bankruptcy forms, providing you important background information that you might not know from your memory alone. Everyone filing a Hawaii bankruptcy must provide the Bankruptcy Court with a complete and accurate listing of not just their debts, but also all of their creditors, or any collection agencies which might have been contacting you on your creditors’ behalf. You can start bygetting your credit report from each of the three credit reporting agencies.
Take Credit Counseling
Filing bankruptcy in Lihue involves a couple of mandatory steps, including 2 educational course requirements. Note that the first course occurs before you file for Hawaii bankruptcy, and is called “credit counseling.” The main purpose of bankruptcy credit counseling is to determine whether filing bankruptcy in Lihue is actually the best way for you to address your financial situation. You can attend your bankruptcy credit counseling in person, or it can be done over the internet and the phone. Most credit counseling courses in Hawaii are administered online, making them convenient and hassle-free for you no matter where you are located. You have to take your credit counseling course from anapproved agency.
Complete the Bankruptcy Forms
Completing your Lihue bankruptcy forms is one of the tasks that you do not have to do personally. If you work with a lawyer, their office will fill out the bankruptcy forms based on the documents and information you provide to them. They will also review everything with you before filing all the documents for your Chapter 7 bankruptcy in Lihue with the bankruptcy Court. If you’re doing it all by yourself, you could get each one of the bankruptcy forms you need to fill out as fillable PDF files online, for free. You should ideally review this instructions manual before starting and remember to take your time to carefully answer all questions.
Get Your Filing Fee
You’ll have to pay your Court filing fee when you file your Chapter 7 bankruptcy in Lihue with the Hawaii Bankruptcy Court. Currently, the cost of filing a Chapter 7 case is $335. If you’re able to pay the fee, you can go to a post office near you in order to purchase a money order for the exact amount. If you make less than 150 % of the federal poverty guidelines, you are eligible to apply for a filing fee waiver. If you do not qualify for a fee waiver, you may also ask the Lihue Bankruptcy Court to pay your filing fee in installments once your bankruptcy case has been filed.
Print Your Bankruptcy Forms
Once you have collected your Hawaii bankruptcy filing fee and completed your bankruptcy forms, the next step is to print out your forms in order to file your Chapter 7 bankruptcy in Lihue. Also, wherever you print these forms, make sure you print them on one-sided pages. It is recommended that you print a useful checklist like this one, to make sure that you’re not missing anything. If you hire a lawyer to file your Chapter 7 bankruptcy in Hawaii, they will submit all your documents to the Hawaii Bankruptcy Court through an electronic filing system, saving you from the hassle of travelling to the Court or mailing everything in.
Go to Court to File Your Forms
The next important step for filing a Chapter 7 bankruptcy in Lihue is to go to submit your bankruptcy forms to the Court. On the one hand, if you are working with a Hawaii bankruptcy attorney, they’ll be able to submit all your bankruptcy paperwork electronically. If you’re filing bankruptcy in Lihue without an attorney, you’ll have to submit the paperwork to the Court yourself. Since the Hawaii Bankruptcy Court is in Honolulu, you can mail all of your documents instead of travelling there. Consider including a second copy of your Voluntary Petition along with a self-addressed stamped envelope, so the clerk can send you back a stamped copy. As soon as your bankruptcy paperwork is time-stamped by the clerk as “filed,” you’ll enjoy the protection of the automatic stay. That’s the provision of the bankruptcy laws that makes it illegal for creditors to continue to pursue you to collect the debt that you owe.
Mail Documents to Your Trustee
A Hawaii bankruptcy Trusteeis assigned to all Chapter 7 and Chapter 13 bankruptcy cases soon after filing. While the bankruptcy Trustee is not a judge, they have tremendous influence over your Lihue bankruptcy case. This is because they handle several important aspects of a bankruptcy proceeding. In a Chapter 7 bankruptcy in Lihue, the Trustee will administer the bankruptcy estate and distribute any non-exempt property to your creditors. In a typical bankruptcy case, the only interaction you will have with your Trustee is at the meeting of creditors. Everyone filing a Chapter 7 bankruptcy in Lihue has a duty to cooperate with their bankruptcy Trustee.
Take Bankruptcy Course 2
Debtor education is the second course and has to be taken later in the Hawaii bankruptcy process. However, keep in mind that the exact timing of the course depends on which Lihue bankruptcy chapter you file under. You have to take this debtor education course and file your certificate of completion within sixty days of your first meeting of creditors or 341 meeting if you file under Chapter 7. Otherwise, you risk having your Chapter 7 bankruptcy in Lihue closed without first receiving your discharge. Debtor education course has to be taken from an agency that is approved by the U.S. Trustee’s office as they can issue a valid completion certificate. Types of topics that are often covered in the debtor education course are budgeting and interest rates.
Attend Your 341 Meeting
Hawaii bankruptcy cases have several stages. And one of the most crucial phases of your bankruptcy case in Lihue is the 341 meeting, also called a “341 hearing” or a “meeting of creditors.” Attendance at the 341 meeting is required, and failure to appear will likely result in your Lihue bankruptcy case being dismissed, or thrown out. The main purpose of this 341 hearing is for your Trustee to uncover important information about your Hawaii bankruptcy case. Your Trustee will ask you some questions, but just try your best to stay relaxed. The whole procedure is relatively informal and quick. Creditors rarely attend this meeting and the biggest issue that usually comes up is forgetting to bring a picture ID and adequate proofof your social security number.
Dealing with Your Car
Your vehicle will play two important roles in your Chapter 7 bankruptcy in Lihue. If you have an auto loan, it’s a debt that you must include in your Hawaii bankruptcy schedules. As it’s a secured debt, you will need to disclose your intentions to the Court with regards to what you would like to do with your car. You can do this by filing the Statement of Intentions. If you would like to keep your car after filing bankruptcy in Lihue, you will have to keep the loan that comes with the car by entering into a reaffirmation agreement with your lender. If you are behind on payments, or struggling to make the payment each month, consider surrenderingthe car as part of your Hawaii bankruptcy.
Hawaii Bankruptcy Means Test, Bankruptcy Forms, and Exemptions for Lihue
Hawaii Means Test
In order to make sure that Chapter 7 bankruptcy in Lihue is not abused by people who can afford to pay at least some of their debts under a Chapter 13 plan, the bankruptcy law requires prospective Chapter 7 bankruptcy filers to prove that they have genuine financial need. And this is where theHawaii bankruptcy Means Test enters the picture. The Hawaii bankruptcy Means Test will compare your income against the median income in Hawaii for a household of equivalent size. If your average income is lower, you will qualify forChapter 7 bankruptcy in Lihue. If you don’t qualify for Chapter 7 under the Hawaii bankruptcy Means Test, you can file Chapter 13 to get relief instead.
Median Income Levels for Hawaii
Hawaii Median Income Standards for Means Test for Cases Filed On or After May 1, 2020
|Household Size||Monthly Income||Annual Income|
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.
|Household Size||State Poverty Level||Fee Waiver Limit (150% PL)|
Hawaii Bankruptcy Forms
All folks filing a Chapter 7 bankruptcy in Lihue have to use the federal bankruptcy forms. You can find these bankruptcy forms online. There are also a few local forms that you have to complete. You can easily access all the Hawaii bankruptcy forms needed under Chapter 7 to file your case in the filing packet that is available on the Bankruptcy Court's website.
When you file your Chapter 7 bankruptcy in Lihue, you have the option of choosing federal bankruptcy exemptions or Hawaii bankruptcy exemptions. This is because Hawaii hasn’t opted out of thefederal bankruptcy exemptions included in the US Bankruptcy Code. WithHawaii bankruptcy exemptions, you can keep your home during a Chapter 7 bankruptcy in Lihue if you’re able to exempt the equityyou have and continue to pay your mortgage after filing bankruptcy in Lihue.