Hawaii Bankruptcy People often file for bankruptcy when they have problems with
debt, but only under the necessary circumstances. Bankruptcy is
recommended for those who can only pay the minimum amount of their
bills, those who cannot find a budget solution under a five-year mark,
those who have continuous notices of foreclosures on their loans or
mortgages, and those who have seen financial halts, such as divorces,
loss of a job, or severe illness.
Unlike popular thought, bankruptcy does not clear all debts. Filing for
bankruptcy does not eliminate a majority of student loans, child
support, government agency penalties and fines, debts of fraud,
alimony, back taxes, large purchases of five hundred fifty dollars or
more made within a ninety-day time span of filing, or any cash advances
within a seventy-day time span of more than eight hundred twenty-five
Bankruptcy Chapters The state of Hawaii allows for individuals to file for two
different kinds of bankruptcy: Chapter Seven and Chapter Thirteen.
Chapter Seven bankruptcy is often called straight bankruptcy and clears
all debts--with the exception of those previously listed--and allows a
clean slate. Chapter Thirteen bankruptcy is often called wage earner
bankruptcy and requires a repayment arrangement to be set up so that
debt can be repaid over an extended time period.
Prevention Acts As of April 2005, the Bankruptcy Abuse Prevention and Consumer
Prevention Acts were passed by the President. These acts put
limitations on personal access to United States bankruptcy courts.
October 2005 stipulated more changes that place specific bans on
Chapter Seven bankruptcies, increase all payments for Chapter Thirteen
bankruptcies, give specific presumptions towards debtors who have an
increase in penalties, and reduce any judicial discretion for balancing
interests that have competitions.
Chapter Seven and Thirteen Bankruptcy Chapter Seven bankruptcy is usually called a liquidation of
debts. This kind of bankruptcy is fast and easy for individuals who are
eligible. These include partnerships, sole individuals, married
individuals, and corporations.
Under Chapter Seven an assigned trustee will sell gathered non-exempt
property and use the received funds to pay the outstanding debts. A
majority of cases under Chapter Seven do not have any non-exempt
property for sale and are named as no-asset cases.
A means test will decided whether or not an individual or corporation
is eligible for federal bankruptcy under Chapter Seven. One finite
determiner for bankruptcy eligibility is usually the amount of income a
home has. If the income is under the stipulated amount, then bankruptcy
through Chapter Seven is normally an option.
Those who do not qualify for Chapter Seven bankruptcy can often qualify
for Chapter Thirteen bankruptcy. All expenses will be taken into
consideration upon eligibility determination along with the monthly
income of the entire household. Car payment and mortgage amounts will
be deducted from the income amount to determine what is in fact
To determine the payment amounts for the next five years, the
disposable amount is then multiple by sixty. Before individuals can
apply for bankruptcy, despite eligibility, they must first have
approval from credit counseling, as stipulated by the October 2005 act.