Americans learn almost from birth that it’s a good thing to buy all sorts of goods and services. A highly paid army of persuaders saying “buy, buy, buy.” Easily available credit makes living beyond one’s means easy and resisting the siren sounds of the advertisers difficult. However, we’re also told that if we fail to pay for it all right on time, we’re miserable deadbeats. As past clients can testify, it’s easy to fall into this trap.

If for some reason such as illness, loss of work or just bad planning, our ability to pay for the goods and services we need is interrupted, fear and guilt are often our first feelings.

Well, I say that’s nonsense. There is a lot more to life than an A+ credit report rating, and a person is more than the sum of their finances. Remember, large creditors expect defaults and bankruptcies and treat them as a cost of doing business. The reason so many credit card companies exist is because it is a very profitable business, even with so many bankruptcies.

If you suddenly find yourself without a job, unexpected medical bills, or struggling under an impossible debt load, contact us. Our Hawaii bankruptcy attorney’s can help provide a chance for a fresh start.

A Chapter 7 bankruptcy is sometimes called “straight” bankruptcy, which cancels most of your debts. The Chapter 7 bankruptcy process takes about three to four months. In most cases, it only requires only one trip to the courthouse. Filing for bankruptcy immediately stops your creditors form trying to collect what you owe them. So, at least temporarily, creditors cannot legally garnish your wages, go after your car, house, or other property.  

Normally you will be able to keep the assets you own free and clear. This includes your house and furnishings, cars, and jewelry (to a certain value), and other basic items. These items are called “exempt property.”

At the end of the bankruptcy process, most of your debts are wiped out (discharged) by the court. You no longer legally owe your creditors. As a result, you can’t file for Chapter 7 bankruptcy again for another eight years.

If you are deeply in debt, a Chapter 7 bankruptcy may seem like a magic wand. But, there are drawbacks. First, a record of filing the bankruptcy will remain on your credit report for the next ten years. This will make it more difficult to get credit. Second, bankruptcy in Hawaii can get intrusive. You are required to disclose your financial activities during the previous year, as well as your current property holdings. 

There is another type of bankruptcy, called a Chapter 13 bankruptcy. Chapter 13 bankruptcy in Hawaii lets you discharge most of your debts by paying all or a portion of them over a three to five-year period.

To file for Chapter 13 bankruptcy, you fill out a packet of forms listing all your money, property, expenses, debts and income.  You then file them with the bankruptcy court. As in a Chapter 7 bankruptcy, the act of filing immediately stops your creditors from taking further action against you. The automatic stay can stop foreclosure and stop car repossession. This allows you time to review your options to save your property with your bankruptcy lawyer. In addition, you must file with the court a workable plan to repay your debts, including student loans, given your income and expenses. Usually you make payments directly to a bankruptcy trustee  who in turn distributes the money to your creditors.

Regardless of filing a Chapter 7  or  Chapter 13 bankruptcy, keep in mind that debts can get the better of the most conscientious among us. Bankruptcy is a truly worthy part of our legal system, based on forgiveness rather than retribution. The Bankruptcy Code in our country allows productive members of our society to continue to contribute to the economy. It also helps families stay together, and keeps the ranks of the homeless from growing even larger.

Contact bankruptcy attorney Blake Goodman to get help with your Honolulu bankruptcy. Call our office or fill out our questionnaire and start taking your life back from debt.