When it comes to bankruptcy you need to understand that it is not the end of the world like it has been perceived as. Bankruptcy was created to help you. Not hurt you. Under the bankruptcy code in Maui, the residents can retain a certain property by exempting it from the creditors. Our Maui Bankruptcy attorneys can help you to understand everything about the exemptions.
In shorter words, you will not lose absolutely all of your possessions because you file for bankruptcy. There are exemptions that have been created to help prevent this. Our Maui Bankruptcy attorneys can help you to understand everything about the exemptions.
When your income can’t cover your bills, filing for bankruptcy will help you to gain control over your finances. Every person deserves a fresh start and Bankruptcy filing gives you this opportunity. We know that filing for Bankruptcy in Maui can be difficult at the start. But once you get an understanding of the process, you will be able to gain the benefits.
Qualifying for Bankruptcy in Maui:
The first step towards learning the process is to know that there are primary types of bankruptcy. It is the attorneys who will decide which one would suit you best. You have to explain your situations briefly to the attorneys and they will verify the terms to see for which chapter you qualify.
Chapter 7 Bankruptcy: This is determined by the means test. If the income of your family is lower than the median income of your state, you qualify for Chapter 7 filing. Your monthly expenses are also covered by the chapter to make sure that you are exempted from your basic needs in order to pay the debt.
Chapter 13 Bankruptcy: if your income exceeds the Chapter 7 limits, and you are capable of repayment of debt in a short span of time, then you will have to apply for a Chapter 13 Bankruptcy case. This usually involves a three or five-year repayment plan. The amount of repayment per month is calculated in the same way as Chapter 7. You will have to pay a great portion of your disposable income, the value of your nonexempt property, along with the amount which is considered as the non-dischargeable debt.
Only a professional attorney can help you understand the major differences between Chapter 7 and Chapter 13 Bankruptcy cases.
Maui’s Bankruptcy Exemptions to Protect Property:
Whether you’ll lose your property or get a chance to keep it is decided by thecChapter which is filed. It is assured that you won’t lose everything. And if you are lucky enough, you might not have to lose anything at all.
By looking at the two exemption schemes, you get a chance to choose the find out which assets you can protect while you file for Bankruptcy. The schemes ensure that your needs are met. There are even federal nonbankruptcy exemptions in Maui.
- In chapter 7 bankruptcy, a trustee will be appointed to manage the matters such as the sale of your property or the ones which are exempted for the creditors.
- According to Chapter 13, you can keep all your property. But you will have to pay the non-exempt tax value of the property throughout the period of your debt repayment.
- The couple or spouse who files for a joint bankruptcy gets a double exemption amount in each category. As long as both the partners have an ownership interest in the asset, they can pay jointly for that asset.
Maui Exemption List:
Here are the common exemptions for bankruptcy in Maui.
Maui Homestead Exemption:
If you are the family head or a person over 65, you can get an exemption of $30,000 of equity. But you must not own any other property in Maui more than one acre. The head is determined by the IRS as they follow the standard for the head of household. In case you are not the head, the equity amount will be $20,000 in your home. This amount won’t get double if you apply for joint bankruptcy.
Maui Motor Vehicle Exemption:
On one motor vehicle, you can protect up to an amount of $2,575 of equity.
Other Exemptions:
- Personal Property: House furniture, appliances, books, and clothes which are used by your family are considered as personal property. Along with jewelry and watches, you will get up to a total of $1000 in value.
- Pension and Retirement Accounts: The IRAs and ERISA– qualified accounts, along with the firefighter’s pensions, police officers pensions, employee’s pensions, and public officer’s pensions are exempted according to the law.
- Tools of Trade: The uniforms, tools, books, and other equipment you need for your business are also exempted.
- Insurance: Health, Accident, Sickness benefits, endowment policy, annuity contract, and all other types of insurance are exempted from the debt.
As you can see, you don’t end up losing everything when you file for bankruptcy. The bankruptcy code is designed so that no ordinary families have to fall prey to hard times where they have to give up everything that belongs to them.
Both Chapter 7 and Chapter 13 bankruptcy do a brilliant job to allow the debtors to keep their home, vehicles, and essential items of their property. Another benefit of filing under either of the chapters will prevent foreclosure, repossession, and stop wage garnishments.
What will happen due to bankruptcy?
We’ve talked a lot about exemptions, but what about what is guaranteed to happen to you during bankruptcy? While no case is the same there are consistencies across bankruptcy that will take place no matter the chapter.
Bankruptcy will go on your credit report
As soon as you file for bankruptcy it is placed on your credit report. From that point on it will remain on your credit report for at least seven years. As a result of this your credit score is going to take a hit, but that score can only last for so long.
If you would like help in recovering your credit score then you can take our two years to 720 credit program we offer. It is completely free and is intended to help clients who are recovering from bankruptcy.
You are required to take courses
There are two courses you will be required to take before you can complete bankruptcy. A credit counseling class to dig into your finances and financial history to make sure that you actually do need bankruptcy. That course is required before you can even file.
The second course is a debtor education course to teach you ways to avoid falling into this kind of financial strife again. The second class must be completed before your debts can be discharged even after filing for bankruptcy and completing the procedures associated with the chapter you filed under.
Contact us for assistance
Understanding how to file for bankruptcy on your own and what exemptions you may qualify for is too complicated. You need someone there that will have your best interests in mind throughout the filing process of bankruptcy.
Bankruptcy is not something that should be handled alone. With representation like Blake Goodman you can make sure that you are receiving the kind of bankruptcy that you deserve. One that may hopefully lead to no losses.
Not in Maui? Come see our other offices!
At Blake Goodman, we strive to help as many of you as possible. This is why we have offices in not only Maui, but in O’ahu as well. Be sure to check out our other website DebtfreeHawaii.com to read about our other locations.
You may be in need of help for credit assistance in a place other than Maui and we want to help you. We will do our best to help any residents of this beautiful state. Everyone deserves someone to represent them during bankruptcy.