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Chapter 13 Bankruptcy in Hawaii

Our Hawaii Bankruptcy Lawyer Explains Chapter 13 Bankruptcy

Chapter 13 Bankruptcy

Individual debtors who have a regular income (including those engaged in business) and who qualify via a financial means test can file a Chapter 13 bankruptcy to restructure or reorganize debt. A qualified Hawaii bankruptcy attorney is essential for navigating this complex financial process, and Chapter 13 offers a great deal of benefits for individuals.

A debtor “engaged in business” is someone who is self-employed and incurs trade credit in the production of income from that employment. A debtor engaged in business may continue to operate his or her business in a Chapter 13 case. The debtor proposes a plan that outlines how his or her debts will be repaid. The debtor must devote all of his or her disposable income to payments under the plan for three to five years.

Qualifying for Chapter 13

To qualify for Chapter 13, a debtor must have:

  • Regular income
  • Unsecured debts of less than $419,275
  • Secured debts of less than $1,257,850 (these dollar amounts are usually increased every three years according to a set formula).

A trustee is appointed in all Chapter 13 cases, but the trustee’s role is much more limited than in a Chapter 7 case. The small business debtor is allowed to continue his or her business. In Chapter 13 cases, a debtor receives a discharge when the debtor has completed all payments under the plan.

Generally, a discharge in bankruptcy means that a debtor’s obligations are erased or wiped out. When a discharge is granted, it protects the debtor from personal liability on the discharged debt. However, a discharge is only available to certain debtors and for certain debts.

I’ve never seen a debtor successfully represent themselves under Chapter 13’s complex mandates without the assistance of a competent bankruptcy lawyer. However, i’ve seen plenty make a mess of things without one. You are strongly urged to contact an experienced Hawaii bankruptcy attorney who is versed in Chapter 13 law in order to guide you through the Court’s maze.

Reduced Payments to a Budget

A Chapter 13 bankruptcy consolidates all your bills. Items such as cars, house arrears, credit cards and tax debts are combined into one monthly payment. The payment goes to a trustee of the Court who pays your creditors, kind of like a consolidation loan. Debtors often find in Chapter 13 that the monthly payment is much less than paying all debts individually. It’s based on what you can afford to pay back in three to five years, not so much on what you owe.

Chapter 13 Bankruptcy Stops Foreclosure and Repossession

A Chapter 13 Plan helps you not lose any property to the bankruptcy system. We’ll design a plan to stop foreclosure and stop car repossession. And while the plan reorganizes your mortgage arrearage, in most cases it will also reduce your overall debt load.

Stops Creditor Calls

A Chapter 13 bankruptcy stops creditors from calling. A strong restraining order goes into effect when you file a Chapter 13 Plan. The automatic stay prevents all creditor contact including calls, letters, lawsuits, garnishment, foreclosure and harassment. The creditors have to communicate with your attorney in order to reach you. This “breathing-room,” called the automatic stay, is the best thing about bankruptcy.

Less Embarrassment

A “light” version of bankruptcy, a Chapter 13 Plan helps you pay your debts. It also helps you avoid the stigma and problems accompanying Chapter 7 bankruptcy.

Chapter 13 Bankruptcy Protects Co-Signers

If someone has co-signed a debt with you, a Chapter 13 Plan usually keeps creditors from being able to make collection attempts against your co-signer.

Chapter 13 Bankruptcy Can Help Eliminate Old Tax Debt

Chapter 13 is often the most powerful tool available for taxpayers who’ve gotten stuck in the bottomless pit of old tax debt. It provides a lending hand towards getting back on track with State and Federal taxes.  It can also be a more complete solution than Chapter 7 bankruptcy.

Chapter 13 Bankruptcy Can Help Manage Student Loans

If you are struggling to pay student loans, Chapter 13 can help. However, the vast majority of borrowers cannot discharge student loans. The debts can be consolidated as part of your Chapter 13 payment plan. After you receive your bankruptcy discharge, your income may be freed up so you can have an easier time paying any remaining student loans.

Chapter 13 Bankruptcy Rejects Invalid Claims

The Court may hold hearings regarding your debts, rejecting those that are unfair or unfounded.

Minimal Appearances in Court

Only one mandatory appearance is necessary, and it’s not in front of a judge or jury. Your section 341 meeting is in front of your trustee in a hearing room. It usually lasts 5 minutes. In a large majority of cases, it’s the only appearance you’ll have to make.

Will I lose my home by filing Chapter 13 bankruptcy?

A common concern is the thought of losing the family home. Although that is possible in some cases, Chapter 13 offers homeowners the chance to save their residences.

In a Chapter 13 proceeding, even if the debtor is behind on mortgage payments, the wage-earner plan can pay back any missed mortgage payments. The home will not be lost if the debtor continues to make on-going, future payments when due.

If the debtor is a renter rather than a homeowner, and if the debtor is current in his or her rent payments, it is unlikely that the lessor would even become aware of the bankruptcy proceeding. If the debtor is behind, however, he or she could be evicted.

A Chapter 13 bankruptcy establishes a payment plan whereby you can catch up with your secured debt obligations (including a mortgage) over three to five years and discharge remaining unsecured debts. Once the plan is approved by the court, you will make one single monthly payment to the bankruptcy trustee. This repayment plan will include provisions to help pay off any accumulated mortgage rearrange (the back amount owed). Most people who file Chapter 13 make all the required payments and will become current on the mortgage to save the home.

Another benefit of Chapter 13 is for homeowners who have a second mortgage and owe more money on the primary mortgage than the property is worth. In this situation, the second mortgage or line of equity may be eligible for a complete discharge. Known as a “lien strip,” this can be extremely helpful for homeowners whose property value has dropped in recent years.

What Happens to Your Car in Chapter 13?

The depreciatory nature of an automobile means that people sometimes owe more for a vehicle than its actual value. If this is the case, when you file for bankruptcy, then you may qualify for what is called a “cramdown.” A cramdown reduces the amount owed to the car’s actual value, because this is the amount that the lender would receive if it repossessed and sold the vehicle. To qualify, you must have purchased the car more than 2 ½ years prior to bankruptcy, along with other requirements. A qualified lawyer can review the facts of your situation to see if a cramdown is available to you.

As with homes, a Chapter 13 plan can also allow you to pay the arrearage (or late payments), helping you to become (and stay) current on your car loan. The amount of car payments must be considered reasonable by the courts, however – if you are making an exceptionally large payment every month for a luxury car, you might have to downgrade to a more affordable vehicle. No matter what, there is a solution to your problem, just call our office to learn about the options to keep your car in Chapter 13.

What happens if my salary increases after filing a Chapter 13 wage-earner plan?

In all my years of experience representing Chapter 13 debtors, I’ve never had a trustee motion the court to increase my client’s payment plan after it was confirmed by the court. However, it is a possibility. Whether changes in salary will change the payment plan depends on a complete consideration of all of the circumstances.

The trustee can closely scrutinize the debtor’s disposable income after the case has been filed but before the court has confirmed the plan.  This is done to make sure that the payments and the income are consistent and will incorporate any necessary changes into the plan. If the debtor’s income changes during the duration of the repayment plan, it may not necessitate any changes in payments. However, the trustee may ask that payments be adjusted if the debtor’s income increases significantly. The trustee does not always closely monitor the debtor’s income, and it may actually be outside the scope of a trustee’s duties to do so.

The trustee will consider not only the salary increase, but also whether there has been a corresponding increase in disposable income. Disposable income is the amount of the debtor’s salary that remains after deducting all reasonable living expenses.

If both the debtor’s salary and expenses increase, there may be no increase in disposable income and therefore no change in the payment plan. If there is a significant increase in disposable income, the trustee may ask for an increase in payments. In cases in which the plan extends over more than thirty-six months, the increased payments may actually reduce the length of the plan’s term, so that the debtor has paid off the debts and receives a discharge sooner.

How will filing under Chapter 13 impact my credit report?

A consumer credit report may include Chapter 13 bankruptcy information for seven years from the time the case is filed. This will not make it impossible to obtain credit. Instead, it means that you will have to overcome the negative remark in order to obtain a favorable credit standing.

One of the free services we offer our clients is our 720 Credit Program. We believe in complete financial rehabilitation, including a recovered credit score. Utilizing our 720 program will guide you through the mechanics of returning to a 720+ credit rating within as little as 12 to 24 months after we’ve filed bankruptcy for you or completed a debt negotiation plan.

In actuality, most of my clients obtain vehicle and house financing even while the Chapter 13 case is still pending. Some clients are even able to obtain a credit card or unsecured bank loan before the seven year period expires. This is just the reality of aggressive lending policies that creditors practice today.

Costs of Not Having a Clean Credit Report

It is true that the cost of obtaining credit with less than a squeaky clean credit report profile results in the payment of higher interest rates on your borrowing. But you must ask yourself, what is the cost of not declaring bankruptcy, both economically and emotionally?

Most other non-bankruptcy credit information is also included on a consumer credit report for seven years. In fact, it can be longer if the information is relevant for a longer time period. For example, if the civil judgment against the debtor is valid for ten years, it can be reported for credit rating purposes for the same time period.

Because both the Fair Credit Reporting Act, which controls what a credit agency may include in a consumer’s credit report, and the Bankruptcy Code are federal law, the same rules apply in all states. There may be some differences, however, in relation to the more-than-seven-year information, since most of the relevant time periods or statutes of limitations are found in the individual states’ laws.

What happens after bankruptcy?

Getting Off the Credit Merry-Go-Round!

We hope you will take full advantage of your bankruptcy and if you have not already, start living on a cash basis.

  • Do not buy it unless you have the cash in your pocket.
  • Save at least a little money for emergencies.
  • Use a checking account debit card for reservations and internet purchases. U.S. Bank even offers debit cards that earn frequent flyer miles.
  • Throw each new credit card offer away with a chuckle.
  • Contribute as much as you can to take full advantage of any 401k or other matching contribution plan at work. This is “free money.”
  • Avoid whole life insurance, purchase term life instead and save or invest the difference.
In doing so, you can:
  • Never have another creditor call at home, work etc. again.
  • Never have another credit card bill come in the mail.
  • Rebuild your credit by making rent/mortgage and car payments on time, every time.
If you would like to borrow in the future for a major purchase we suggest that you:
  • Make every rent/mortgage/car payment etc. on time, every time.
  • Maintain steady employment and do not take on any new debt.
  • Keep your income to debt ratio as favorable as possible.
  • Visit with your lender well before you intend to borrow and get their advice on what they are looking for in order to improve your chances of borrowing.
  • Shop, shop, shop around. A simple method for all major purchases is to check with several banks and dealers. By doing this you will narrow your choices down to two. Lastly,  be honest with each about what the other is offering and see if they will “sweeten the deal” to earn your business.
When it comes time to buy a home, we suggest:
  • Realize that realtors and lenders make more money if you spend more money.
  • Avoid the pressure to buy as much home as you can qualify for.
  • Buy a modest home and finance it for 10, 15 or 20 years at the most and you will save an enormous amount in interest. You will also build equity much quicker so you can avoid being “upside down” if you do need to sell.

People like you have been in your situation before, and our office helps military personnel as well as civilians needing assistance. They sought out the counsel of an experienced bankruptcy attorney and only had good things to say about the process. They got help and so can you.

Honolulu

Address: 900 Fort Street Mall Suite 910, Honolulu, HI 96813
Phone: (808) 528-4274

Kaneohe

Address: 46-005 Kawa Street #206
Kaneohe, HI 96744
Phone: (808) 528-4274

Aiea

Address: 498-211 Pali Momi St. #608
Aiea, HI 96701
Phone: (808) 528-4274

Maui

Address: 220 Imi Kala St suite 203 c
Wailuku, HI 96793
Phone: (808) 426-2004

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DISCLAIMER: This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice. Seek competent legal counsel for advice on any legal matter. We are a debt relief agency. We help people file for relief under the bankruptcy code.
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James Terry

James Terry is a 2017 graduate from the University of Hawai’i William S. Richardson School of Law in Honolulu. Upon graduation, he worked as a clerk in the State of Hawai’i Intermediate Court of Appeals before accepting the job at Blake Goodman, P.C. He is licensed in Hawai’i and admitted to the Federal Courts for the District of Hawai’i. James was born and raised in Hawai’i on the island of Oahu and attended Saint Louis High School and Hawai’i Pacific University prior to entering law school.

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Vianne Yang

Viane was born in California and eventually was drawn to the islands. With her degree in finance, she hopes to assist clients get out of debt and start a fresh new life. In her spare time, she enjoys running along the beach and catching beautiful sunsets.

Coronavirus – Our Firm’s Response
The health and safety of our staff and our clients is our first priority.
Staff will stay home if they are sick. And, we recommend that client’s do the same. We will
be happy to reschedule any office meetings.

For our potential clients and existing clients:

We will be happy to offer all of our services online.

You may even have your free consultation by phone.

After retaining our office, we can work with you via phone and emails. We can even file your
case electronically. Therefore, we can both perform our duties to keep the members of our
families and community safe from the spread of Covid-19.

We are prepared to do everything possible to be proactive and safe.
We believe that our actions today will safeguard the health of our clients and staff, while
continuing to serve you with unsurpassed professionalism and support.

Honolulu Office Parking

Free Parking Locations

Parking option #1 : Downtown municipal parking, 1052 Bethel Street.

Clients who are disabled or nursing should be aware that there are no elevators, only conveniently located stairs at the downtown Municipal Parking Lot.

Parking option #2 : Chinatown municipal parking, Marin tower 60 N., Nimitz Highway. Parking entrance on Smith Street.
Parking option #3 : Harbor Court Parking, 847 Bethel Street.

You can find our office in the heart of downtown Honolulu. The office is very easy to find, and we cover all parking costs, if you park in one of these three parking locations listed below. Please don’t park in our building at Pioneer Plaza. We don’t reimburse you for that cost.

Hawaii bankruptcy lawyer Blake Goodman is ready to help you and your family put your financial struggles behind you and begin the next chapter in your life. We can assist with your Chapter 13, Chapter 7 or debt settlement claim. You may also wish to contact our Windward Side-Kaneohe office.

Kaneohe Office Parking

There is ample free parking in front of and behind the building. We look forward to addressing your student loan, debt settlement, tax resolution or Hawaii bankruptcy concerns. There is no charge for your first consultation. You can also contact our Honolulu office.

Aiea Office Parking

Turn at the Big City Diner off Pali Momi Street. Free parking available in front of building.

Use the information to contact our Hawaii bankruptcy attorneys‘ Pearlridge – Pearl City – Aiea office. Someone from our office will be in touch shortly. We look forward to addressing your student loan, debt settlement, tax resolution or Hawaii bankruptcy concerns. There is no charge for your first consultation. You can also contact our Honolulu office or at our Windward Side-Kaneohe office.

Malia Conner

Born and raised on the island of Oahu, Malia Connor moved to California’s Bay Area to study dance at San Francisco State University, where she formed her own dance company, 25 years ago. She moved back to Oahu in 2017 to begin taking care of her aging parents.

Malia is excited for the opportunity to help Hawai’i residents get out of debt and is eager to apply her executive admin skills and creativity to the team of Blake Goodman.

Anna Lisa Hughes

Anna Lisa Hughes received a Bachelor’s degree in Spanish from San Francisco State University, and became fluent in both Spanish and Mandarin Chinese while studying and working abroad in Chile and China. Anna Lisa has nine years of paralegal experience in various areas of practice, including immigration, estate planning, civil rights, and bankruptcy law. Originally from Colorado, she moved to Hawaii for the cultural and ethnic diversity of the island of Oahu. Outside of the office, Anna Lisa has also had a career in music as a bassist and songwriter.

Joshua Humpries

Joshua Humphries is a 2008 graduate from the Widener University School of Law in Delaware. Upon graduation, he worked for a national law firm specializing in Chapter 7 and Chapter 13 bankruptcies for several years before moving to a smaller firm where he continued he established the firm’s bankruptcy practice. During that time, he also represented claimants in workers compensation and social security disability claims. In 2013, he also began practicing in the areas of debt collection and general civil litigation. He is licensed in Pennsylvania, New Jersey, Hawaii and admitted to the Federal Courts for the District of New Jersey, Eastern and Middle Districts of Pennsylvania and the District of Hawaii.

Dora Casillas

Prior to coming to this beautiful island, Dora Casillas lived in Simi Valley, California where she worked in the legal field for 18 years. Dora finds bankruptcy law the most rewarding where at the end of the day, she knows she helped many obtain a fresh start leading to a less stressful life.

Born in Texas and raised in California, Dora is fluent in Spanish. She enjoys the breathtaking sunrises and sunsets, along with the hiking trails and beaches. Dora is thrilled to be here and to have the opportunity to work with such a great team to serve the people of Hawaii.

Julia Oaten

I attended the University of Manchester, (UK) gaining a B.A. with Honors in Art History, before obtaining my J.D. from the University of Baltimore School of Law. Before moving to Hawaii and specializing in bankruptcy, I practiced criminal law as a Public Defender in Annapolis, MD.

While I am Cuban – Armenian, I grew up in England. My family and I moved to Hawaii in 2007 when my husband was offered a great job here. I stayed at home until we were all settled in and then responded to Blake’s job offer, and have been here ever since. I am the proud owner of an English bulldog and I enjoy fishing and hiking Oahu’s beautiful island with my husband and young son.

I really enjoy helping our clients achieve a fresh start and hopefully relieve them of some of the stress being in debt can cause while protecting them from creditors and helping them survive the bankruptcy process with their dignity intact.

Blanca Goodman

I’m Blake’s wife of 20 plus years. My job is very exciting – I deal with all our clients’ creditors, collections agencies and attorneys. I process all our client’s bills statements, warnings letters, and law suits. I’m the one who spends one hour or more on the phone finding the accounts or negotiating the best deal I can for our clients.

I’m from Mexico and I came to this country 20 years ago. I speak Spanish, and I would love to learn Japanese and Korean. We have two smart twin girls. One of my greatest enjoyments is to listen to audio self improvement books, and classical music.

I dance Kahiko and Auana hula, and wake up every morning to a Zumba exercise routine.

My purpose is to help our clients find debt freedom as soon possible, between 2 years or less. I do have constant communication with our clients about their case, and I want our clients to feel that I do care deeply from my heart.

Jeff Mulford

Jeff Mulford attended California Western School of Law in San Diego, California on a creative problem solving scholarship. When he first stated practicing in 2010, he represented numerous chapter 7 clients throughout Southern California during the height of the foreclosure crisis. He enjoys practicing bankruptcy law because it provides relief to people going through difficult times and puts them on a fresh start towards a brighter financial future.

Prior to law school, Jeff earned an M.B.A. with a concentration in finance from California State University, Long Beach and a B.A. from the University of California at Davis.

Jeff moved to Hawaii in 2016 because he loves the beauty of the islands and the slower pace of life. When he is not working, he enjoys spending time with his family, traveling, and reading.

Blake Goodman

I received my law degree from George Washington University in Washington, D.C. in 1989 and have been exclusively practicing bankruptcy related law in Texas, New Mexico, and Hawaii ever since. In the past, I was a Certified Public Accountant, receiving my license from the State of Maryland in 1988. Today I am unlicensed, inactive and am not holding myself out as a CPA.

I specialize in providing solutions to a family’s debt burdens and tax problems. To date, I’ve helped over 8,000 individuals and families alleviate their financial setbacks caused by overwhelming debt problems. Our law firm is one of the largest bankruptcy filers in the entire state of Hawaii. I am a member of the Hawaii State Bar Association, the Federal Bankruptcy Law Section, the Tax Freedom Institute and the National Association of Consumer Bankruptcy Lawyers. In addition to being a member of the American Bankruptcy Institute, my article “The Often Overlooked 10-Year Tax Discharge Rule” was published in the ABI Journal.

I moved to Hawaii in 1999 with Blanca, my wife, who works with me at the office, because we wanted to live in tropical paradise. We now have twin daughters and have found Hawaii to be more than just a pretty place to live. It is the center of the universe for us.