Bankruptcy is a legal procedure that allows an individual or business to have some or all of their debts discharged. It is typically considered as an option of last resort, because while it can stave off financial disaster, it has some substantial long-term consequences warranting careful consideration of the costs and benefits. Since it's a creation of federal law, bankruptcy is handled in federal courts. Therefore, the rules and procedures governing it in Hawaii will be the same as everywhere else in the country. Distinct courts in Lahaina, Hawaii will have some unique rules, however, so you should consult with a local lawyer before you file.
Chapter 7 Bankruptcy in Lahaina, Hawaii
There are 2 typical types of consumer bankruptcy in Lahaina, Hawaii: Chapter 7 and 13. Chapter 7 bankruptcy involves liquidation of some of the debtor's assets. It requires some percentage of the debtor's property to be sold in order to pay off as much of his or her debt as possible. However, the majority of property that most people own is exempt. This typically includes homes, vehicles, insurance policies, and retirement accounts. These do not have to be sold.
Once the non-exempt property is sold, the rest of the dischargeable debt is excused. Some forms of debt, however, is non-dischargeable, including student loans, criminal fines, and others. If most of your debt in Lahaina, Hawaii is not dischargeable, Chapter 7 may not be the best option.
Chapter 13 Bankruptcy in Lahaina, Hawaii
In Lahaina, Hawaii, Chapter 13 is substantially different from Chapter 7. Chapter 13 may or may not be the best choice for you; this depends on the facts of your specific situation. Chapter 13 Bankruptcy involves a court setting up an altered payment plan, which allows the debtor to pay off most or all of his debts over an extended period of time, through monthly payments that should, assuming that the debtor is willing to make a few sacrifices, be manageable.
Which Type of Consumer Bankruptcy Should I File in Lahaina, Hawaii
The answer to this question depends strongly on your distinct situation. If you have enough stable income to manage a payment plan, and a lot of non-exempt property that you are unwilling to part with, Chapter 13 may be a good option. If you don't have much stable income, and most of your property is exempt, Chapter 7 might be better.
Whatever your situation, you should speak with a local Lahaina, Hawaii bankruptcy Lawyer. Your Attorney will be able to advise you of your options and their likely results, which will help you make a more educated decision.