One of the major dilemmas with bankruptcy is how many people do not know the facts about bankruptcy.
In a situation that can be as dire and important as deciding whether you should declare bankruptcy or not, it’s important to be informed about the decision you will be making.
You need to keep yourself informed about not only Chapter 7 bankruptcy, but Chapter 13 bankruptcy as well.
Gaining knowledge about your potential options, what they mean for you, and what you will need to do after you declare will better prepare you for your eventual recovery if the decision is made to declare bankruptcy.
The compassionate and knowledgeable bankruptcy attorneys at Blake Goodman, PC, Attorney, can help you examine your debts and decide if bankruptcy is right for you. To get started, contact us today.
Which Bankruptcy Chapter Should I File?
If you are unsure if bankruptcy is what you need, then do not be afraid to schedule an appointment with one of our bankruptcy attorneys at Blake Goodman, PC, Attorney in one of our Hawaii offices. We can help explain to you what bankruptcy in Hawaii is like, and why it may or may not be your best option.
In general:
- Chapter 7 is for lower-income filers who do not have the disposable income to repay debts.
- Chapter 13 allows people with a regular income to repay their debts in affordable payment plans.
We help people throughout the state take back their lives and gain financial freedom. Our bankruptcy, tax resolution, and debt settlement office is one of the largest bankruptcy filers in the state. We help all types of people in all types of situations.
For military personnel, our office offers bankruptcy services as well as legal advice regarding bankruptcy and security clearances.
Do You Need to File for Bankruptcy in Hawaii?
Americans learn almost from birth that it’s a good thing to buy all sorts of goods and services. A highly paid army of persuaders saying “buy, buy, buy.” Easily available credit makes living beyond one’s means easy and resisting the siren sounds of the advertisers difficult.
However, we’re also told that if we fail to pay for it all right on time, we’re miserable deadbeats. As past clients can testify, it’s easy to fall into this trap.
If, for some reason such as illness, loss of work, or just bad planning, our ability to pay for the goods and services we need is interrupted, fear and guilt are often our first feelings.
We say that’s nonsense. There is a lot more to life than an A+ credit report rating, and a person is more than the sum of their finances. Remember, large creditors expect defaults and bankruptcies and treat them as a cost of doing business.
The reason so many credit card companies exist is because it is a very profitable business, even with so many bankruptcies.
If you suddenly find yourself without a job, with unexpected medical bills, or struggling under an impossible debt load, contact us. Our Honolulu bankruptcy attorneys can help provide a chance for a fresh start.
A Brief Overview of Chapter 7 Bankruptcy in Hawaii
A Chapter 7 bankruptcy is sometimes called “straight” bankruptcy, which cancels most of your debts. The Chapter 7 bankruptcy process takes about 3 to 4 months. In most cases, it only requires only one trip to the courthouse.
Filing for bankruptcy immediately stops your creditors from trying to collect what you owe them. So, at least temporarily, creditors cannot legally garnish your wages or go after your car, house, or other property.
You may be wondering what exactly happens during Chapter 7 bankruptcy, and that’s okay. To explain, the automatic stay may be a feature of bankruptcy law that goes into effect right away upon submitting a petition.
This forces creditors to stop actions (like foreclosures, repossessions, garnishments, and evictions) against the actual debtor.
Throughout this method, the gathering and distribution of assets will occur in line with a good and orderly methodology as per the Bankruptcy Code.
What Can You Keep if You File a Chapter 7 Bankruptcy?
Individual debtors are entitled to keep assets free from the claims of creditors, that are below the value of federal or state exemption laws.
Typical exemptions are:
- The homestead exemption (equity in personal residence),
- Money,
- Vehicle,
- Insurance policies,
- Furnishings,
- Clothing,
- Wages, and
- Tools utilized in the debtor’s job.
The overall number of the exemption depends on whether or not federal or state exemptions are obtainable and/or used.
At the end of the bankruptcy process, most of your debts are wiped out (discharged) by the court. You no longer legally owe your creditors. As a result, you can’t file for Chapter 7 bankruptcy again for another 8 years.
If you are deeply in debt, a Chapter 7 bankruptcy may seem like a magic wand — but there are drawbacks. First, a record of filing the bankruptcy will remain on your credit report for the next 10 years.
This will make it more difficult to get credit. Second, Hawaii bankruptcy can get intrusive. You are required to disclose your financial activities during the previous year, as well as your current property holdings.
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 qualify for Chapter 13, a debtor must have Total Debts of less than $2.75M.
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 Chapter 13 plan.
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 After I File for Bankruptcy?
To be blunt, whether you file for Chapter 7 or Chapter 13 bankruptcy, it is going to do damage to your credit. However, filing for bankruptcy does not mean the end of the world for you or your credit.
For starters, 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 a bankruptcy attorney 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 to repair your credit score. Within 2 years, you may even be able to reach a 720 score.
Bankruptcy is not the End of the World
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.
Blake Goodman, PC, Attorney, provides 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 forward 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 a few 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?
To get started, please contact us online today.