What Assets Can You Keep In Bankruptcy In Hawaii?
If you’re thinking about filing for bankruptcy, you might have heard about asset seizure and are wondering what you can do to protect your assets while also finding a way to deal with overwhelming debt. Fortunately, it’s not true that filing for bankruptcy means you’ll lose all of your assets. You may even be able to keep all or almost all of what you own. Federal bankruptcy code as well as individual state laws allow debtors to use exemptions to protect their property, assets, and belongings in the bankruptcy process. The laws can be complex and will vary between states.
Working with an experienced Hawaii bankruptcy lawyer is essential if you want to use your bankruptcy to your best advantage and protect your assets as fully as possible.
What Is Chapter 7 Bankruptcy & How To Choose The Right Type Of Bankruptcy In Hawaii
Chapter 7 is the “liquidation” chapter of the Bankruptcy Code and the most common one used by individuals, corporations, and limited liability companies. There are multiple types of bankruptcy that can be filed, each with its own advantages and disadvantages. Not everyone will qualify to file for every type of bankruptcy, but your bankruptcy law firm can help you determine which type of bankruptcy might be best for you.
Chapter 7 bankruptcy is the most common type of bankruptcy that individuals file. With this type of bankruptcy, you must meet specific income qualifications based on how many people live in your household. If you qualify and your bankruptcy is approved, a bankruptcy trustee will be assigned to your case, who will have the authority to sell some of your assets. The proceeds will be used to pay toward your debts, and the remaining balances of your eligible debts will be discharged, or forgiven, and you’ll no longer owe anything. Eligible debts that can be discharged in a Chapter 7 bankruptcy include personal loans, home loans, and credit card debt. Some debts that generally cannot be discharged in bankruptcy include student loans, child support payments, and taxes.
What Assets Are Protected By Exemptions In Bankruptcy In Hawaii?
Exemptions are laws that protect your assets when you file for bankruptcy. The goal of bankruptcy is to help you get a fresh financial start, not to make you homeless and destitute. That’s why federal and state guidelines have been established: they protect debtors in the bankruptcy process and help you get set up for a better financial future.
Which assets are protected in bankruptcy will depend on where you live. In Hawaii, like many other states, you can choose between the state exemption system and the federal exemptions system. Your bankruptcy attorney can review your assets and calculate which exemption system will work most to your advantage. However, you must choose one system; you cannot mix and match state or federal exemptions.
Exemptions generally protect a specific type or category of property. Your home, vehicle, and personal property may be protected from seizure by exemptions. In some cases, the law states a maximum value or dollar amount for each type of asset that is protected.
The Role Of The Bankruptcy Trustee In Liquidating Non-Exempt Assets In Chapter 7 Bankruptcy
The bankruptcy trustee’s job is to repay your creditors as much as possible. When you file for a Chapter 7 bankruptcy, your assets and property become part of a bankruptcy estate. The trustee that is assigned to your case will have the authority to liquidate and sell any non-exempt property and use those funds to repay your creditors according to a court-established priority level. You will use either state or federal exemptions to determine which property can be kept and which may be liquidated. Your bankruptcy trustee will look at the equity and value of property and determine whether it is worth being sold.
Some of the many exemptions that Hawaii recognizes include:
- $20,000-30,000 in home equity
- $2575 in a vehicle
- Up to $1000 total in jewelry and watches
- Household furnishings, appliances, books, clothing used by you and your family
- $2800 of tools used in your trade
- Burial plot
- Some insurance benefits
- Some retirement accounts
Federal bankruptcy exemptions are more generous than Hawaii’s state laws, in some instances. Consulting with your bankruptcy lawyer is essential as you determine which exemption system to use and understand how they apply to your assets.
Don’t Lose Your Assets In a Hawaii Chapter 7 Bankruptcy & Talk To An Attorney Today!
In some cases, if your asset is not worth enough to justify the cost of selling it, the bankruptcy trustee may choose not to liquidate it. In these cases, you can keep the property.
Never make transfers to retirement accounts or other protected accounts, or transfer ownership of possessions right before you file for bankruptcy, because those funds may be seized and used to pay your debts. Blake Goodman, P.C. can help you time your bankruptcy and protect your non-exempt assets to the fullest extent possible. Contact us!
This article is courtesy of Las Vegas Bankruptcy Lawyers, a bankruptcy law firm in Nevada that is dedicated to providing the highest quality bankruptcy services for debtors seeking a fresh financial start.