Bankruptcy Exemptions
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Maui Bankruptcy Exemptions 

Retain Your Vehicle During Bankruptcy in Maui

It is a common misconception that you must give up your car or other badly needed assets in order to file for bankruptcy. The truth is that most bankruptcy filers in Hawaii are able to keep their vehicles and all of their other assets, in Chapter 7 or Chapter 13. The law makes most basic household assets, and even retirement savings in excess of $1 million, exempt from liquidation. 

Bankruptcy filers in Hawaii may opt to use either the State of Hawaii bankruptcy exemptions or a set of federal exemptions provided in the Bankruptcy Code. There are significant differences between the two sets of exemptions, and selecting the most advantageous can sometimes be a complicated balancing act. 

Auto loans must be listed in the bankruptcy filing, as must all debts. However, filing bankruptcy does not mean the loan is canceled. The debtor can elect to reaffirm an auto loan to exclude it from the bankruptcy discharge, and thus retain the vehicle so long as timely payments continue to be made. 

Bankruptcy Exemptions in Hawaii 

In Hawaii, bankruptcy filers can utilize specific exemptions to protect certain assets from being liquidated during bankruptcy proceedings. 

Here are some common bankruptcy exemptions in Hawaii:

  • Homestead Exemption: In Hawaii, individuals can protect up to $30,000 of equity in their primary residence or other property covered by the homestead exemption.
  • Personal Property: Hawaii allows exemptions for personal property, including:
    • Clothing, household furnishings, and appliances up to $2,575 in aggregate value.
    • Health aids.
    • Jewelry up to $1,275.
    • Motor vehicle equity up to $2,575.
    • Tools of trade, books, and equipment up to $2,575.
    • Burial plot.
  • Wages: Hawaii provides a wage exemption of 30 times the federal minimum hourly wage per week.
  • Pensions and Retirement Accounts: Various retirement accounts, including IRAs, Roth IRAs, and pension plans, are exempt from bankruptcy proceedings.
  • Insurance: Life insurance proceeds if the policy prohibits use to pay creditors.
  • Public Benefits: Certain public benefits, including unemployment compensation, workers' compensation, and social security benefits, are exempt.
  • Wildcard: Hawaii has a wildcard exemption of $200 that can be applied to any property.
  • Tools of Trade: Certain tools, books, and equipment necessary for the filer's occupation are exempt up to $2,575.

Understanding these bankruptcy exemptions in Hawaii is essential for individuals considering bankruptcy as a debt relief option. Consulting with a bankruptcy attorney can provide guidance on how to leverage these exemptions effectively and protect valuable assets during the bankruptcy process.

The Law Office of Jean Christensen LLLC is proud to serve clients in Maui and throughout the state of Hawaii. Call us at (808) 865-0420 or fill out our online contact form to find out more about how we can assist you.

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