Tourism remains the mainstay of the Hawaiian economy. Due to Covid-19, the lifeblood industry of the state has been suffered a significant blow and is only now starting to recover.
Location of Hawaii Bankruptcy Courts:
US Bankruptcy Court
1132 Bishop St # 250L
Honolulu, HI 96813
Hawaii Bankruptcy Exemptions:
Hawaii Homestead Exemption
If you’re the head of the family or over 65, you can exempt up to $30,000 of equity in no more than one acre of real property located in Hawaii. Head of the family is defined as meeting the IRS standard for the head of household, or residing in the real property and caring for a direct relative (for example, a child, parent, sibling, or grandchild). If you’re not the head of the family, you may protect up to $20,000 of equity in your home.
Sale proceeds are exempt for six months after the sale. Spouses can’t double the Hawaii homestead exemption. Property held by the entirety in Hawaii is exempt against claims of creditors of only one spouse or reciprocal beneficiary. (Haw. Rev. Stat. § 651-91, 92, 96).
Hawaii Motor Vehicle Exemption
You can protect up to $2,575 of equity in one motor vehicle. (Haw. Rev. Stat. § 651-121).
Other Bankruptcy Exemptions in Hawaii
Here are additional types of property you’ll be able to protect.
- Personal property. Household furnishings, appliances, books, and clothing used by you and your family; jewelry and watches up to a total of $1,000 in value (Haw. Rev. Stat. § 651-121 (1)); burial plot, up to 250 square feet, and all improvements and gravestones upon it (Haw. Rev. Stat. § 651-121); insurance proceeds or proceeds from the sale of personal property (up to six months after the sale) (Haw. Rev. Stat. § 651-121); income earned during the 31 days before filing bankruptcy (Haw. Rev. Stat. § 651-121).
- Pensions and retirement accounts. IRAs and ERISA-qualified retirement accounts (Haw. Rev. Stat. § 651-124); firefighters’ pensions (Haw. Rev. Stat. § 88-169); police officers’ pensions (Haw. Rev. Stat. § 88-169); public officers’ & employees’ pensions (Haw. Rev. Stat. §§ 88-91 and 653-3).
- Tools of the trade. Tools, instruments, uniforms, books, equipment, one commercial fishing boat and nets, one motor vehicle, and any other personal property ordinarily and reasonably necessary to your business, trade, or profession. (Haw. Rev. Stat. § 651-121)
- Insurance. Accident, health, or sickness benefits (Haw. Rev. Stat. § 431:10-231); annuity contract or endowment policy proceeds wherein the beneficiary is the insured’s spouse, child, or parent (Haw. Rev. Stat. § 431:10-232 (b)); group life insurance proceeds (Haw. Rev. Stat. § 431:10-233); life insurance proceeds if text of the policy prohibits proceeds from being used to pay the beneficiary’s creditors (Haw. Rev. Stat. § 431:10D-112); life or health insurance policy for spouse or child (Haw. Rev. Stat. § 431:10-234).
Find out more about retirement accounts in Your Retirement Plan in Bankruptcy.
More Bankruptcy Information
The information that follows usually isn’t needed unless you’re ready to prepare your paperwork and file your case.
Hawaii Credit Counseling and Debtor Education Information
Individual filers must take two financial courses—one before filing and another before receiving a discharge (debt forgiveness). Approved providers are listed under “Credit Counseling & Debtor Education” on the U.S. Trustee’s website (be sure to scroll down to your district).