When you are beset by problems and can pay only the minimum amounts on your bills and are getting notices of foreclosures on your mortgage and other loans, you are basically bankrupt. Your option is to file for bankruptcy. Remember to consult your Hawaii bankruptcy lawyer for information and assistance in the filing of your Chapter 7 bankruptcy.
The official petition should be filed with the bankruptcy court with the statement of financial affairs. Your petition will include the list of all your creditors with the corresponding amount and explanation of their claim. You will also need to provide the details about your income and the list of all your property with the details of your living expenses per month. You will also be asked to pay a filing fee with miscellaneous administrative expenses and a surcharge for the trustee.
The automatic stay designed to preserve your assets and give you a break from getting sued is issued as soon as the bankruptcy is filed. It effectively prevents your creditors from collecting even a part of your debts. The trustee assigned to your case by the court takes control of your property except those under exemptions and sells it to pay the expenses for the administration of the case and then pays your creditors with allowed claims under a priority list already drawn up. Your earnings including wages after the filing of the case are yours to keep and are beyond the reach of your old creditors.
Under the Hawaii bankruptcy laws, there are two exemption schemes which include items and amounts that you can keep. The first exemption scheme allows you keep the following:
* Your home, including co-op or mobile home up to $20,200
* Life insurance policy with loan value to $10,775
* Life insurance contract if it has not matured
* Life insurance payments for person you needed for support
* Child support payments and alimony
* $550 per item in any household goods maximum of $10,775
* Health Aids
* Pensions and retirement benefits
* Tools essential to your trade up to $20,200
* Personal Jewelry up to $1,350
* Payments for Lost Earnings
* Your car or motor vehicle costing less than $3,225
* Personal injury compensation payments to $20,200
* Social Security, wrongful death payments, public assistance, unemployment compensation, crime victims’ compensation, and veterans’ benefits
* Wild Card – $1,075 of any property plus up to $10,125 of any amount of unused homestead exemption
The amount of the federal exemptions maybe doubled for married couples.