If you have taken on so many debts that you cannot pay your minimum payments any more, or if you have fallen several months behind on your bills, then it might be time to consider filing bankruptcy. here is what you need to know about Hawaii bankruptcy laws.

Bankruptcy Exemptions

Under current Hawaii bankruptcy laws, certain assets are protected by the courts. Hawaii allows you to choose one of two exemption schemes. Under the federal scheme, the following items are exempt:

• Up to $20,200 for your home
• Life insurance from a person you depended on
• Up to $10,775 for a loan value life insurance policy
• Child support or alimony necessary for support
• Pensions, retirement benefits, or ERISA qualified benefits
• Health aids
• Up to $1,350 for jewelry
• Up to $10,775 for household goods, with $550 per item limit
• Unmatured life insurance contracts
• Payments for lost earnings
• Up to $3,225 for your vehicle
• Up to $1,075 for any property and up to $10,125 of unused homestead exemption
• Up to $20,200 for personal injury payments or public assistance or benefits
• Up to $20,200 for tools of the trade

Under the Hawaii exemption scheme, you may keep:

• Up to $30,000 in interest for your property
• Up to $1,000 for jewelry, household goods, books and clothing
• Up to $2,575 for one vehicle
• Any tools or other personal property needed for livelihood, including one vehicle.
• Any wages or salaries for the 31 days prior to filing
• ERISA-qualified benefits for the three years prior to filing
• Workers’ compensation, disability, or unemployment benefits
• Insurance proceeds
• Business partnership property
• Up to 250 square feet of a burial plot, including fencing, tombstones and monuments

Chapter 7 Bankruptcy Information

Debtors who wish to wipe out all debts and virtually start over after bankruptcy may attempt to file Chapter 7. This form of bankruptcy requires the debtor to pass a means test, but once all assets have been liquidated to pay down the debt load, it erases most debts.

Chapter 13 Bankruptcy Information

Chapter 13 allows debtors to keep some assets as they work with creditors under the supervision and direction of the court appointed trustee. This gives them the chance to pay back their debts in a more rational way, all while benefiting from court bankruptcy protection.