Hawaii Bankruptcy Defense Lawyers
Facing financial difficulties can be overwhelming, but you don’t have to go through it alone. At Delancey Street, we understand the complexities of bankruptcy and are here to help you navigate the process. Whether you’re considering Chapter 7 or Chapter 13 bankruptcy, our experienced team of Hawaii bankruptcy defense lawyers is dedicated to providing you with the support and guidance you need to achieve a fresh financial start.
Understanding Bankruptcy in Hawaii
What is Bankruptcy?
Bankruptcy is a legal process designed to help individuals and businesses eliminate or repay their debts under the protection of the bankruptcy court. In Hawaii, as in other states, bankruptcy is governed by federal law, specifically the Bankruptcy Code, but it also incorporates certain state-specific rules and exemptions. The primary goal of bankruptcy is to provide a fresh start to honest but unfortunate debtors while ensuring fair treatment for creditors.
Types of Bankruptcy
In Hawaii, the two most common types of bankruptcy for individuals are Chapter 7 and Chapter 13:
- Chapter 7 Bankruptcy: Often referred to as “liquidation bankruptcy,” Chapter 7 involves the sale of a debtor’s non-exempt assets by a trustee to pay off creditors. Most unsecured debts, such as credit card debt and medical bills, can be discharged under Chapter 7, providing the debtor with a fresh start.
- Chapter 13 Bankruptcy: Known as “reorganization bankruptcy,” Chapter 13 allows debtors with a regular income to create a repayment plan to pay off their debts over three to five years. This type of bankruptcy is ideal for individuals who want to keep their assets, such as a home or car, while catching up on overdue payments.
The Bankruptcy Process in Hawaii
Filing for bankruptcy in Hawaii involves several steps, each requiring careful attention to detail and adherence to legal procedures. Here’s a general overview of the process:
- Credit Counseling: Before filing for bankruptcy, you must complete a credit counseling course from an approved agency. This course helps you understand your financial situation and explore alternatives to bankruptcy.
- Filing the Petition: The bankruptcy process begins with filing a petition with the U.S. Bankruptcy Court for the District of Hawaii. This petition includes detailed information about your finances, assets, debts, income, and expenses.
- Automatic Stay: Once you file your bankruptcy petition, an automatic stay goes into effect. This stay halts most collection actions against you, including foreclosure, repossession, wage garnishment, and creditor harassment.
- 341 Meeting: Approximately one month after filing, you will attend a meeting of creditors, also known as the 341 meeting. During this meeting, the bankruptcy trustee and any creditors who choose to attend will ask you questions about your financial situation and the information provided in your petition.
- Debt Discharge or Repayment Plan: In Chapter 7 cases, if the trustee and court find no issues, your eligible debts will be discharged, typically within a few months. In Chapter 13 cases, you will follow your court-approved repayment plan, making regular payments to the trustee, who will distribute the funds to your creditors.
- Debtor Education: After filing, you must complete a debtor education course before receiving your discharge. This course provides financial management tools to help you avoid future financial problems.
Common Concerns and Misconceptions
Will I Lose My Home?
One of the most common concerns among individuals considering bankruptcy is the fear of losing their home. Fortunately, Hawaii has generous homestead exemptions that can protect your primary residence in bankruptcy. Under Hawaii law, you can exempt up to $30,000 of equity in your home if you are single, and up to $60,000 if you are married or head of a household. This means that if your home’s equity is within these limits, you can keep your home even if you file for bankruptcy.
Impact on Credit Score
It’s true that filing for bankruptcy will have a negative impact on your credit score, and the bankruptcy will remain on your credit report for up to 10 years. However, many people find that their credit score begins to improve shortly after their debts are discharged, as they are no longer burdened by unmanageable debt. Additionally, there are steps you can take to rebuild your credit, such as obtaining a secured credit card, making timely payments, and monitoring your credit report for errors.
Bankruptcy and Employment
Another common misconception is that filing for bankruptcy will automatically disqualify you from certain jobs. While some employers may consider your financial history, particularly for positions involving financial responsibility, bankruptcy cannot be the sole reason for not hiring or firing you. Federal law prohibits employment discrimination based solely on bankruptcy status.
The Role of a Bankruptcy Defense Lawyer
Navigating the bankruptcy process can be complex and stressful, but having an experienced bankruptcy defense lawyer by your side can make a significant difference. Here are some of the ways our team at Delancey Street can assist you:
Personalized Legal Advice
Every financial situation is unique, and there is no one-size-fits-all solution to bankruptcy. Our attorneys will take the time to understand your specific circumstances and provide personalized legal advice tailored to your needs. We will help you determine whether Chapter 7 or Chapter 13 bankruptcy is the right option for you and guide you through the entire process.
Preparation and Filing of Documents
Filing for bankruptcy requires extensive documentation, including detailed financial statements, schedules of assets and liabilities, and various forms. Our attorneys will assist you in gathering and preparing all necessary documents, ensuring that everything is accurately completed and filed on time. This attention to detail can help prevent delays and complications in your case.
Representation at Hearings
Throughout the bankruptcy process, there are several hearings and meetings that you must attend, including the 341 meeting of creditors. Our attorneys will represent you at these hearings, providing you with the support and advocacy you need to navigate the proceedings confidently. We will also handle any negotiations with creditors on your behalf.
Protection of Your Rights
Bankruptcy law includes numerous protections for debtors, but creditors may still attempt to challenge your case or seek exceptions to the automatic stay. Our attorneys will vigorously defend your rights, ensuring that you receive the full benefits of bankruptcy protection and that your creditors comply with the law.
Real-Life Scenarios
To illustrate the impact of bankruptcy and the importance of legal representation, let’s consider a few hypothetical scenarios:
Scenario 1: Overwhelming Medical Debt
Imagine Jane, a single mother living in Honolulu, who has accumulated significant medical debt due to an unexpected illness. Despite working two jobs, she is unable to keep up with her medical bills, credit card payments, and living expenses. Jane decides to file for Chapter 7 bankruptcy to discharge her unsecured debts and get a fresh start. With the help of our experienced attorneys, Jane successfully navigates the bankruptcy process and is able to eliminate her medical debt, allowing her to focus on rebuilding her financial future.
Scenario 2: Facing Foreclosure
John and Mary, a married couple from Maui, are struggling to keep up with their mortgage payments after John lost his job. They are at risk of losing their home to foreclosure. After consulting with our team, they decide to file for Chapter 13 bankruptcy. This allows them to create a repayment plan to catch up on their mortgage arrears while keeping their home. With our guidance, John and Mary successfully complete their repayment plan and save their home from foreclosure.
Scenario 3: Small Business Owner in Debt
Tom, a small business owner in Hilo, has accumulated substantial business debt due to a downturn in the economy. He is considering closing his business and filing for bankruptcy. After discussing his options with our attorneys, Tom decides to file for Chapter 13 bankruptcy, which allows him to restructure his business debts and continue operating his business. With our support, Tom is able to develop a manageable repayment plan and keep his business afloat.
Conclusion
Bankruptcy can be a daunting process, but with the right legal support, it can also be a powerful tool for achieving financial stability. At Delancey Street, we are committed to helping you navigate the complexities of bankruptcy and providing you with the guidance and support you need to make informed decisions. If you are considering bankruptcy in Hawaii, don’t hesitate to reach out to our experienced team of bankruptcy defense lawyers. Contact us today to schedule a consultation and take the first step toward a brighter financial future. Remember, you don’t have to face financial difficulties alone. Our team at Delancey Street is here to help you every step of the way. Call us now or fill out our online form to schedule your free consultation. Let’s work together to achieve the fresh start you deserve.