What are my personal bankruptcy options in Hawaii?

Under the residency requirements in the bankruptcy code, you must file bankruptcy in the state where you live or where you have spent the better part of the 180 days leading up to your bankruptcy. So, if you live in Hawaii and if you are Filing Bankruptcy Hawaii, what types of bankruptcy are available to you as an individual?

There are two major types of bankruptcy available to individuals in Hawaii who cannot pay back their debts. These two options are:

• Chapter 7 Bankruptcy. This type of bankruptcy is called total liquidation bankruptcy and, due to tighter bankruptcy laws passed in 2005, has become more difficult to qualify for and less common. In order to be allowed to file a chapter 7 in Hawaii, your income has to be below the Hawaii median. If it is not, you'll have to take a means test if you want to file Chapter 7. In this test, you'll have to show that your income minus your required expenses doesn't leave enough money left over for you to be able to make any kind of debt repayments. If you can prove this, then the first step in the process will be to have many of your assets sold in a bankruptcy sale to generate a bit of money to repay creditors. Once the creditors have gotten the payments from the sale of your stuff, the remaining debts are discharged and the creditors cannot collect any more money from you. 
• Chapter 13 Bankruptcy: This type of bankruptcy is called "wage earners" bankruptcy and has become more common. Under this plan, you don't participate in a bankruptcy sale and you are legally permitted to retain all of the possessions you have. You must, however, repay some amount of your debt based on how much your income is. The amount of debt you repay is determined by a repayment agreement you set, which lasts for a period of three to five years, and which must be approved by the trustee assigned to your case and by your creditors. 

To get help determining what your personal options are based on the amount of money you make, you should scheduled an appointment with a lawyer who specializes in bankruptcy.