A Brief Overview of Chapter 13 Bankruptcy in Hawaii
There is another type of bankruptcy, called a Chapter 13 bankruptcy. Chapter 13 bankruptcy in Hawaii lets you discharge most of your debts by paying all or a portion of them over a 3-to-5-year period.
To file for Chapter 13 bankruptcy, you fill out a packet of forms listing all your money, property, expenses, debts, and income. You then file them with the bankruptcy court. As in a Chapter 7 bankruptcy, the act of filing immediately stops your creditors from taking further action against you. The automatic stay can stop foreclosure and stop car repossession. This allows you time to review your options to save your property with your bankruptcy lawyer. In addition, you must file with the court a workable plan to repay your debts, including student loans, given your income and expenses. Usually, you make payments directly to a bankruptcy trustee, who in turn distributes the money to your creditors.
In addition, to even qualify for Chapter 13 bankruptcy, you must ensure that you have all the following:
- Regular income
- Unsecured debts of less than $419,275
- Secured debts of less than $1,257,850 (these dollar amounts are usually increased every 3 years according to a set formula)
Within all Chapter 13 cases, there is usually a trustee appointed, but their role is much more limited than their role within a Chapter 7 case. However, the small business debtor is actually allowed to continue their business. A debtor just receives a discharge when the debtor has completed all payments under the plan, when it comes to Chapter 13.
When a discharge occurs in bankruptcy, it generally means that a debtor’s obligations are completely wiped out or erased. A granted discharge is when it protects the debtor in question from personal liability on the discharged debt. A discharge is only available to those with certain types of debt.
Our firm has never seen a debtor successfully represent themselves under Chapter 13’s complex mandates without the assistance of a competent bankruptcy lawyer. We have seen plenty of mistakes and issues without a proper representative assisting. We always strongly suggest contacting us and receiving a consultation from an experienced Honolulu bankruptcy attorney that understands how to get through Chapter 13 law.
What Will Happen to My Credit?
To be blunt, whether you file for Chapter 7 or Chapter 13 bankruptcy, it is going to do massive damage to your credit. Many people take years to recover their credit score from the effects of bankruptcy, and it becomes difficult to apply for items such as credit cards when you have a bankruptcy on your file.
However, filing for bankruptcy does not mean the end of the world for you or your credit. For starters, by process of paying back debts, you are already taking a positive step towards fixing your credit. With an eventual clean slate, you will be able to prove to creditors that you were worth a second chance by paying back any credit charges or debts on your name that you accrue after bankruptcy. Over time, your credit score will rise again. If you need help with this, then ask us for how we can help guide you back to the land of positive credit.
One of the ways many people build up their credit score is through car and mortgage payments. A fear that many have is that they will not be able to qualify for largescale loans after bankruptcy, but we’ve had multiple clients that have qualified for home and car loans while still in the process of filing for bankruptcy.
If you come in to speak with us and we decide that Chapter 7 or 13 bankruptcy is the best course of action for you, then we can help you make a plan for what you will do after your bankruptcy case has been filed to repair your credit score. Within 2 years, you may even be able to reach 720.
Keep Your Chin Up
Regardless of if you are filing a Chapter 7 or Chapter 13 bankruptcy, keep in mind that debts can get the better of the most conscientious among us. Bankruptcy is a truly worthy part of our legal system, based on forgiveness rather than retribution. The Bankruptcy Code in our country allows productive members of our society to continue to contribute to the economy. It also helps families stay together and keeps the ranks of the homeless from growing even larger.
We even provide flexible payment options. We fully understand that most of our clients can find it difficult to pay the full fee upfront. With just $100, you can retain our amazing services, and we can answer any questions you may have for us. In addition, we can start handling all those annoying creditor calls that may be coming your way. In time, payments can be made, and once your fee is fully paid, we can move forwards with a fresh start.
Bankruptcy is not the end-of-the-world decision that many feel it is. You should not feel shame or embarrassment about getting a second chance, and bankruptcy is one of the ways to earn that second chance. Do not let the world shame you for seeking out help.
If you do decide to file for bankruptcy, then be ready to make a change in your life. A change that will have long-lasting positive effects. It will not be easy, but when you are 10 years down the line and free of financial burdens, you may feel better about yourself. There is nothing wrong with having the courage to stand up to financial debt and say that you are tired of it. Everyone deserves a second chance, so why not you?
Contact our Honolulu bankruptcy attorneys to get help with your case. You can either call us at (808) 518-4844 or use our online contact page. Explain your situation, and we will try to get back to you as soon as possible. Start taking your life back from debt and build towards a brighter future.
