There are four options for bankruptcy filing in Hawaii. A petitioner may file for Chapter 7, Chapter 11, Chapter 12 or Chapter 13. All bankruptcy proceedings adhere to the new federal rules of the 2005 Bankruptcy Act. A petitioner may file at any of the 4 Hawaiian U.S. District Court locations.
Chapter 7 code, also known as straight bankruptcy, is typically reserved for people with fewer assets and a high rate of unsecured debt. The assets are liquidated to pay off creditors and give a fresh start to those petitioning. Non-dischargeable debts such as those for child support, student loans or taxes will still remain the responsibility of the debtor.
A reorganization of debt, called Chapter 13 is useful for those who have more assets they would like to keep but still need bankruptcy relief. In many cases unsecured debts are minimized and a debt repayment program is started to eliminate debt in 3 to 5 years. Often those who file for Chapter 13 have a steady income and are able to keep their homes or cars as long as they continue making payments.
Chapter 11 is a reorganization code as well and offers debt relief for business to repay creditors over a period of 3 to 5 years also. A business may stay in operation even after filing Chapter 11. Family farmers or fishermen have a code specifically designed to help in tough financial situations, it is known as Chapter 12.
The debtor is responsible to pay for any legal representation as well as the $306 fee for Chapter 7 or $281 fee for Chapter 13. With Chapter 13, the petitioner must also include a repayment summary is his or her schedule.
The recent 2005 Bankruptcy Act requires that all petitioners are required to undergo credit counseling before filing. If bankruptcy is found to be in their best interest, there are many steps that follow.
Hawaii has 4 locations for which to file bankruptcy. The cities where bankruptcy courts can be found are Hilo, Honolulu, Lihue, and Wailuku. The main branch is located in Hawaii's capital city at 1132 Bishop St, Suite 250, Honolulu, HI 96813.