Chapter 13 bankruptcy is called a “wage earner’s plan” because it requires you to pledge your income toward repayment over the life of the plan.
Once you complete all payments under the plan, you’ll receive a discharge of most of your outstanding debts.
It’s crucial that you discuss your proposed plan with an experienced attorney before filing for bankruptcy in Hawaii.
At Blake Goodman, PC, Attorney, our Hawaii professionals are here to support and guide you through the process.
Here’s what you need to know about Chapter 13 bankruptcy in Hawaii.
Filing for Chapter 13 Bankruptcy
When you visit your attorney to file for Chapter 13 bankruptcy, you should have:
- A list of your creditors with the amounts and types of claims they have;
- The source, amount, and frequency of your income, plus any expected increases;
- A detailed breakdown of your monthly living expenses, like food, clothing, shelter, utilities, taxes, transportation, medicine, etc.;
- Evidence of payment from employers that you received in the 60 days before filing;
- A list of the property you own, including your home or car; and
- A copy of your tax return for the most recent tax year.
Finally, you must pay the $235 case filing fee and a $75 miscellaneous administrative fee. You can request to pay the filing fee in installments, but you must pay the fee in full within 180 days of filing.
What Is a Chapter 13 Plan?
When you submit your Chapter 13 bankruptcy petition, you will include a copy of your proposed repayment plan.
Your plan must include payments to secured creditors—those debts secured by collateral—so that they receive at least the collateral’s value.
Unsecured creditors, like credit card companies, must receive at least the amount they would have received if you had liquidated your assets under Chapter 7.
You will make payments to the trustee appointed to your case, and the trustee will distribute the money to your creditors. If you complete the plan, which lasts three or five years, you may receive a discharge of eligible debts.
How Does Chapter 13 Allow Me to Keep My House?
In Chapter 13, you can keep most of your assets so long as your plan provides the required payments to creditors. You must pay at least the property’s value to keep your house.
If you are behind on your mortgage payments, you must also include repayment of the arrears in your plan.
Exemptions can reduce the amount you pay under the plan. Debtors in Hawaii can use either federal exemptions or state-based exemptions.
Using Hawaii bankruptcy exemptions could save more of your home’s value if you are the head of a family or over 65 years old.
Do I Need an Attorney?
Chapter 13 bankruptcy law is complicated. When you contact one of our bankruptcy professionals at Blake Goodman, PC, Attorney, we will handle all the details.
We provide every client with complete, responsive, and attentive service. Our clients rest easy knowing that they receive the best advice from experienced, compassionate, and knowledgeable attorneys at our firm.
Each of our attorneys works to give you the fresh start you deserve. We will continue to support you as you pay off your plan and rebuild your credit after bankruptcy.