Chapter 7 Bankruptcy Hawaii Honolulu2022-08-15T02:17:31+00:00

CHAPTER 7 BANKRUPTCY

What is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy is a legal option for discharging (eliminating) unsecured debts such as personal loans, medical bills, credit cards, etc. In some circumstances, it also allows you to discharge taxes, reduce car loan balances and interest rates, and stop car repossession and wage garnishment. The discharge lasts forever, and it also prevents your creditors from communicating with you in any way (by phone, email, text, mail, etc.).

Call our office now to schedule a free bankruptcy attorney consultation in Honolulu, Hawaii, and we will help you figure out whether filing for bankruptcy is a good option for you.

Do I Qualify For Chapter 7 Bankruptcy?

To qualify for Chapter 7 in Hawaii, your household income from all sources should be below the threshold (determined by Hawaii’s median household income) for the number of people living in your household.

If your household income is above the threshold, you may still qualify for Chapter 7 if you pass the “Means-Test” (a complicated calculation of your household expenses). Getting the qualification right before filing Chapter 7 is essential, therefore, you should contact our office to schedule a free attorney consultation to find out whether you qualify.

Let’s help you get the facts and choose the path most suitable for your situation

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How Can We Help?

Debt doesn’t need to overwhelm you more than necessary, and we understand the anxiety and emotional weight of not only researching your options but choosing between them and then acting. It’s also important not to cut corners, as tempting as it can be.

We understand how making these decisions can affect you in the long run and want to help you sift through your debt relief, debt settlement, debt negotiation and debt consolidation options to find the right solution to fit your needs and support your future. By offering a free consultation session from our base in Honolulu, Hawaii, our bankruptcy lawyers and attorneys take a personal approach and guide you through all of your available options.

To take your first steps towards financial freedom, give us a call to schedule a free attorney consultation appointment.

We’re here to help you!

Frequently Asked Questions About Chapter 7 Bankruptcy

In all the time working with clients, we have found that there are many frequently asked questions about Chapter 7 Bankruptcy. Here are some of them:

Will filing for bankruptcy prevent my car or other belongings from being repossessed?2022-01-27T04:13:57+00:00

In most instances, the answer is yes. Both Chapter 7 and Chapter 13 have options to protect your cars, real property, and other assets.

Talking to a bankruptcy attorney is the best way to determine which option is best for you.

What is the difference between Chapter 7 Bankruptcy and Chapter 13 Bankruptcy? Which one should I file for?2022-01-27T04:13:38+00:00

The right option depends on your situation. How much debt you have, whether you qualify for Chapter 7, your disposable household income, whether you need to cure (repay) mortgage or car payment arrears, whether you owe taxes, and whether you have non-exempt assets you want to keep. We can help you find the best fit for your circumstances, but here is a good starting point:

Chapter 7 is known as a “liquidation” bankruptcy and Chapter 13 is a repayment or reorganization plan. Both usually discharge unsecured regular debt such as credit cards and personal loans when the case is completed, but both have unique benefits.

Chapter 13 has functions that can ‘cure’ (repay) mortgage and Homeowners Association ‘arrears’ (past due payments), which can avoid or stop foreclosure. It can cure car payment arrears to stop repossessions, and in certain situations can reduce the car loan principal balance owed and/or interest rate and repay taxes or domestic support obligations (child support and/or alimony).

Chapter 7 is a quicker and cheaper process and usually preferred by people who qualify (under a certain household income threshold). It doesn’t cover all functions available in Chapter 13 though and may not be the best fit for your needs.

If you are behind on your mortgage or car payments, facing foreclosure, owe taxes or domestic support obligations (child support and/or alimony), you should contact a Honolulu bankruptcy attorney for a free consultation to check your circumstances and help you through this process.

What happens to my credit score after filing for bankruptcy?2022-01-27T04:15:04+00:00

It really depends on your personal circumstances.
If you have a good credit score when you file bankruptcy, you will likely experience a significant reduction in your credit score after filing the case. If your credit score is low when you file, which often is the case for individuals who are behind months and sometimes years on their credit cards and loans payments, the credit score is likely to be minimal after filing bankruptcy. However, if you are disciplined and follow your bankruptcy attorney’s advice, you should be able to bring your credit score back to the 700s within a couple of years of filing bankruptcy. And, if your credit score is low when you file bankruptcy, you will likely rebuild it much faster than other debt-relief options such as debt settlement or debt restructuring.

What does bankruptcy mean for child/spousal support?2022-01-27T03:37:52+00:00

While child/spousal support won’t be discharged, filing for Chapter 7  Bankruptcy or Chapter 13 Bankruptcy can help. These payments can become more manageable by writing off other debts. Chapter 13 may allow you to extend the repayment period by up to five years, resulting in a lower monthly payment.

Is going to court part of the bankruptcy process?2022-01-27T04:19:04+00:00

Most likely not. Court appearances in front of a judge are rare and usually only happen in very complex cases your attorney should be able to anticipate. While official processes can seem frightening, our bankruptcy lawyers and attorneys are there to help and guide you. You must attend a meeting with the person assigned to administer your case (Trustee), but not in court and not in front of a judge. At the meeting, you will be required to answer questions under oath but won’t need to dress formally, and our attorney will prepare you for the meeting and attend it with you. The meeting usually takes about 5-10 minutes to complete.

For more information, book a free consultation with our Honolulu bankruptcy experts to better understand what’s required for your circumstances.

Is bankruptcy my only option?2022-01-27T04:16:06+00:00

Absolutely not. There are several alternative debt relief options you should consider. You can consider debt settlement with each creditor for a lumpsum payment or installment plan, a global settlement with all your creditors to repay a percentage of your debt (usually between 40%-70%) paid in installments for a monthly fee you can afford. Debt consolidation to reduce your interest rate is also a viable option. While bankruptcy tends to be the fastest and most affordable option, some people prefer to spend more $$ over filing bankruptcy. That is, so long as you take into consideration that you may not qualify for a debt consolidation loan, or some of your creditors will refuse to settle for less than the full balance owed. The key is to figure out what is best for you and actively pursue it.

If you’re in debt, having trouble paying off loans, or just overwhelmed and not sure what to do, book a free consultation with our Honolulu-based bankruptcy attorneys. Their expertise and understanding can help guide you through your options.

How do I get rid of debt without losing my house?2022-01-27T04:02:10+00:00

Bankruptcy is usually the most effective way to discharge your debt and protect your home, so long as you do it the right way. Do it the wrong way, and you risk losing your home.

First, you need to determine how much equity you have in the property, which is the property’s value minus all the obligations/liens against the property (common obligations are mortgage, HELOC, tax or judgment liens, etc.).

Second, if there’s no equity or minimal equity, Chapter 7 bankruptcy (if you qualify), may be safe to file without the risk of losing your house. If you have a lot of equity, you should consult with your attorney to determine whether you can exempt (protect) the equity in bankruptcy. If the answer is yes, you should discuss the option of filing chapter 7 or 13 with your bankruptcy attorney.

If you can’t protect the equity in your property in bankruptcy, you may be able to file chapter 13 bankruptcy to repay part of your debt at 0% interest or prefer to settle with your creditors outside bankruptcy.

For the best advice on your options in Hawaii, schedule a free consultation with our Honolulu firm in person or over the phone.

How can bankruptcy help?2022-01-27T04:09:04+00:00

The word might seem scary, but bankruptcy can be a good thing. Protecting you from creditors can help reduce stress and allow you to make calmer financial decisions, but it can also eliminate debts that feel impossible to pay off. It can be a good place to start rebuilding credit and can protect your living situation by allowing you to keep things you need to survive, like a place to live and income you need to live on! While it may not discharge all your debts, it can negotiate easier terms and make your financial future more manageable.

Talk to a bankruptcy lawyer today to consider if it’s the right action for you.

Does Chapter 7 Bankruptcy ‘liquidation’ mean everything I own gets taken away?2022-01-27T03:59:25+00:00

No. By law, you are entitled to certain asset protection. For example, most retirement accounts are protected from creditors up to a specific value. Liquidation usually means using your unprotected assets to repay creditors. While it’s important to remember that every situation is different, and your case will be considered individually, asset protection in bankruptcy is perhaps the most important reason to consult with an experienced bankruptcy attorney. Sometimes, protecting your assets will require pre-filing planning; your attorney should inform you about it and develop a plan to save the assets in bankruptcy or suggest an alternative outside bankruptcy such as debt settlement or loan consolidation.

Do you offer free consultations?2022-01-27T04:05:18+00:00

Yes, we do! Wherever you are in Hawaii, our firm provides free initial consultations regardless of your situation. We know that weighing your options is very important, but big decisions shouldn’t cost you when you need to be tender with your finances. You can’t afford to not take advantage of a free consultation.

Do I qualify for Chapter 7 Bankruptcy?2022-01-27T04:19:35+00:00

To qualify for Chapter 7 in Hawaii, your household income from all sources should be below the threshold (determined by Hawaii’s median household income) for the number of people living in your household.

If your household income is above the threshold, you may still qualify for Chapter 7 if you pass the “Means-Test” (a complicated calculation of your household expenses). Getting the qualification right before filing Chapter 7 is essential, therefore, you should contact our office to schedule a free attorney consultation to find out whether you qualify.

Do I need an Attorney?2022-01-27T04:18:47+00:00

Cheap can be very expensive! The legal system is complicated, and while there is no requirement for a professional to represent you, there can be a lot of potential legal traps that may have long-term consequences for you and your finances. Having an expert on your side to navigate these difficulties can be a massive difference between a successful case and potential further debt or legal trouble. But don’t let doubt rule your decisions.

By scheduling a completely free consultation with one of our bankruptcy attorneys, you have the freedom to weigh your options and decide what’s best for you.

Do I have to include my spouse when filing for bankruptcy?2022-01-27T03:40:03+00:00

No. And your filing will not affect your spouse’s credit or in any other way. However, if you are married and not separated, you are required to disclose your spouse’s contributions to the household income (without disclosing your spouse’s personal information). Married people may file a joint bankruptcy, usually for the exact cost of individual filing. And, it often makes sense to do that if your spouse has a lot of debt.

Can I sell my stuff or pay off any loans before filing for bankruptcy?2022-01-27T04:17:46+00:00

While it may seem like a good idea to sell or transfer your assets to protect them or pay off your debt to family or friends before filing for bankruptcy, it’s best not to do it. There are two reasons for that. First, the Trustee handling your case may be able to recover gifts and transfers within two years before the bankruptcy filing date and repayment of loans within one year before the bankruptcy filing date, to family and friends. Second, such actions may raise a red flag that will cause parties of interest to take a closer look into your case resulting in a lengthy and sometimes more expensive proceeding, or even worse, by uncovering something you are not aware of that may lead to denial of discharge. The bottom line is this will not help your case, but don’t despair! There can be options to make the proceedings easier, and it may be possible to take similar actions with safe legal backing.

If you’re considering filing for bankruptcy, make sure to consult with a bankruptcy attorney to guide you through how to make actions that will protect you and your case. If you’re uncertain, our Honolulu team is here to help.

Can I file for bankruptcy more than once?2022-01-27T03:39:08+00:00

You can absolutely file for bankruptcy more than once, though your previous case may determine how long you must wait before doing so again. You need to wait eight years between filing chapter 7 cases and six years to file chapter 7 if you previously filed chapter 13. However, you may file multiple chapter 13s, even back-to-back, although you may not be eligible for a discharge in subsequent filings, and so long as you re-file for justifiable reasons.

Can I be specific about which creditors I file bankruptcy against?2022-01-27T03:36:59+00:00

​No. You must disclose all your creditors, assets, and household income from all sources. Disclosure of creditors includes debt to family and friends. There’s no direction there to “keep a creditor outside the bankruptcy.” ​However, by law, you are allowed to voluntarily repay any of your creditors after you complete the bankruptcy. And while it may seem to make little sense to repay creditors after discharge, you should keep in mind that you may want to pay back a family member or friend. Similarly, small business owners sometimes want to repay certain suppliers and vendors to maintain a business relationship.

Can creditors still chase me for payments after I file Chapter 7 Bankruptcy?2022-01-27T03:58:54+00:00

No. After you file Chapter 7 and forever after you receive a discharge, all your creditors and debt collectors are prohibited from contacting you, harassing you, or demanding action or payment for debt incurred before you file. The only exceptions are secured creditors, such as car loans and mortgage lenders, if you chose to keep your car or house, and non-dischargeable debt such as certain taxes, child support, alimony, student loans, etc.

Are there any debts Chapter 7 Bankruptcy can’t cover?2022-01-27T03:58:32+00:00

Yes, some obligations such as child/spousal support payments, restitution payments, and DUI/DWI-related damages can’t be discharged in Chapter 7. ​​Student loans are difficult to discharge, and certain taxes may be discharged if you qualify​ if you meet a particular criterion.

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