Hawaii Bankruptcy Guide

Hawaii Bankruptcy Overview

Hawaii offers bankruptcy protections including a homestead exemption of up to $20,000 (or $40,000 for those 65 or older, or married couples filing jointly where at least one spouse is 65+) and the ability to choose between state and federal exemptions. Understanding Hawaii's specific exemption options and requirements is essential for protecting your assets during bankruptcy proceedings.

One significant advantage Hawaii offers is the choice between state exemptions and federal bankruptcy exemptions—you can select whichever set of exemptions better protects your property. Given Hawaii's extremely high cost of living and housing prices, many Hawaii bankruptcy filers find that federal exemptions combined with the wildcard provide better overall protection. This guide covers everything you need to know about filing Chapter 7 or Chapter 13 bankruptcy in Hawaii.

2026 Hawaii Median Income for Chapter 7 Bankruptcy

To qualify for Chapter 7 bankruptcy in Hawaii, your household income must generally be at or below the state median income for your household size. If your income exceeds these thresholds, you may still qualify through the means test or may need to file Chapter 13 instead.

Hawaii Bankruptcy Exemptions: State vs. Federal

Hawaii is one of the states that allows you to choose between Hawaii state exemptions or federal bankruptcy exemptions. You cannot mix and match—you must choose one system or the other. Given Hawaii's high housing costs, many Hawaii filers benefit from using federal exemptions with the wildcard.

Hawaii State Exemptions

Hawaii state exemptions provide modest protection compared to the state's high property values.

Hawaii Homestead Exemption (State)

Up to $20,000 (or $40,000 if you're 65 or older, or married couples filing jointly where at least one spouse is 65+).

Hawaii's homestead exemption is relatively low compared to the state's extremely high housing costs:

• Standard Exemption: $20,000 for those under age 65
• Enhanced Exemption: $40,000 for individuals 65 or older, or married couples where at least one spouse is 65+

Given that the median home price in Honolulu exceeds $800,000, many Hawaii homeowners have equity far exceeding these exemption amounts. This makes federal exemptions often more attractive for renters or those with minimal home equity.

Hawaii Vehicle Exemption (State)

Up to $2,575 in value (or $5,150 if you're disabled).

Hawaii's vehicle exemption is relatively low. If the vehicle has been modified or is specially equipped for a person with a disability, the exemption doubles to $5,150.

Hawaii Personal Property Exemptions (State)

Hawaii provides specific exemptions for various types of personal property:

• Household Furnishings and Appliances: Unlimited protection for household furnishings, appliances, wearing apparel, books, jewelry, and other articles of personal use
• Watches and Jewelry: Up to $1,000 (included in the unlimited household goods exemption above)
• Tax-Exempt Retirement Accounts: Unlimited protection for IRAs (subject to federal limits), 401(k)s, pensions, and other qualified retirement plans
• Life Insurance: Unlimited proceeds if clause prohibits proceeds from being used to pay creditors
• Tools of Trade: Unlimited protection for tools, implements, books, instruments, uniforms, furnishings, fishing boat, nets, and other equipment used in your profession or trade
• Professional License: Unlimited protection for professional licenses

Hawaii Wage and Income Exemptions (State)

• Wages: 95% of the first $100 of monthly wages, 90% of the second $100, and 80% of all additional wages (Hawaii offers stronger wage protection than the federal 75% standard)
• Social Security Benefits: Unlimited protection
• Veterans Benefits: Unlimited protection
• Unemployment Benefits: Unlimited protection
• Workers' Compensation: Unlimited protection
• Disability Benefits: Unlimited protection
• Public Assistance: Unlimited protection for public welfare benefits

Federal Bankruptcy Exemptions (Alternative)

Instead of using Hawaii state exemptions, you can elect to use the federal bankruptcy exemptions. For many Hawaii filers, especially renters, federal exemptions provide better overall protection.

Federal Homestead Exemption

Up to $27,900 ($55,800 for married couples filing jointly).

The federal homestead exemption is higher than Hawaii's standard $20,000 exemption (though lower than the $40,000 enhanced exemption for those 65+). For single filers under 65, federal exemptions provide better homestead protection.

Federal Vehicle Exemption

Up to $4,450 in value.

The federal vehicle exemption ($4,450) is significantly higher than Hawaii's $2,575 state exemption. For most people with vehicle equity, federal exemptions provide much better protection.

Federal Wildcard Exemption

Up to $1,475, plus up to $13,950 of any unused homestead exemption.

The federal wildcard is particularly powerful for Hawaii renters. Given Hawaii's high housing costs, many residents rent rather than own. If you don't use the federal homestead exemption (because you rent), you can apply up to $13,950 of the unused portion to any property—vehicle equity, bank accounts, tax refunds, etc. Combined with the base $1,475 wildcard, you could protect up to $15,425 in personal property.

Other Federal Exemptions

• Household Goods: Up to $700 per item, $14,875 total
• Jewelry: Up to $1,875
• Tools of Trade: Up to $2,800 (compared to Hawaii's unlimited protection)
• Retirement Accounts: Unlimited for most qualified plans

Hawaii Bankruptcy Court

Hawaii has a single federal bankruptcy court district that covers the entire state, including all Hawaiian islands. The U.S. Bankruptcy Court for the District of Hawaii is located in Honolulu.

District of Hawaii Court Location

The District of Hawaii has one primary courthouse:

• Honolulu: 1132 Bishop Street, Suite 250L, Honolulu, HI 96813

All bankruptcy cases for the entire state of Hawaii, including cases from the outer islands (Maui, Kauai, Hawaii/Big Island, Molokai, Lanai), are filed and heard in Honolulu. This can create travel challenges for residents of the outer islands.

Cost of Filing Bankruptcy in Hawaii

The total cost of filing bankruptcy in Hawaii includes both court filing fees and attorney fees. Here's what to expect:

Court Filing Fees (2026)

• Chapter 7: $338
• Chapter 13: $313

These fees are set by federal law and are the same nationwide. In Chapter 7, you may be able to request a fee waiver if your income is below 150% of the federal poverty line, or you may request to pay the filing fee in installments over 120 days.

Attorney Fees in Hawaii

Attorney fees for bankruptcy in Hawaii vary by location (Oahu vs. outer islands), case complexity, and the attorney's experience. Hawaii's attorney fees are among the highest in the nation due to the state's high cost of living:

• Honolulu: $1,500 - $2,400 for Chapter 7; $3,500 - $5,000 for Chapter 13
• Hilo: $1,300 - $2,200 for Chapter 7; $3,200 - $4,700 for Chapter 13
• Kailua-Kona: $1,300 - $2,200 for Chapter 7; $3,200 - $4,700 for Chapter 13
• Maui (Kahului/Wailuku): $1,400 - $2,300 for Chapter 7; $3,300 - $4,900 for Chapter 13
• Kauai (Lihue): $1,400 - $2,300 for Chapter 7; $3,300 - $4,900 for Chapter 13

Chapter 13 attorney fees are typically paid through your repayment plan over 3-5 years, making bankruptcy more accessible even if you cannot afford the full fee upfront. Many Chapter 7 attorneys also offer payment plans for their fees.

Hawaii-Specific Bankruptcy Considerations

Extremely High Cost of Living

Hawaii has the highest cost of living in the United States, which affects bankruptcy in several ways:

• Hawaii has the highest median incomes in the nation ($127,847 for a 4-person household), making it easier for more people to qualify for Chapter 7 based on income
• The means test accounts for Hawaii's higher living expenses, potentially allowing higher-income filers to qualify for Chapter 7
• Many Hawaii residents rent rather than own homes due to extremely high housing costs, making the federal wildcard exemption particularly valuable

Inter-Island Travel Requirements

If you live on an outer island (Maui, Kauai, Big Island, Molokai, Lanai), you'll need to travel to Honolulu for bankruptcy proceedings. This includes:

• The 341 Meeting of Creditors (required for all Chapter 7 and Chapter 13 cases)
• Any additional hearings or trustee meetings
• Inter-island flights can cost $100-$300+ round trip, adding to the cost of bankruptcy

Some bankruptcy attorneys on the outer islands can coordinate the logistics and may attend certain proceedings on your behalf, but you'll typically need to appear personally for the 341 Meeting.

Military Personnel and BAH

Hawaii has a significant military presence, including Pearl Harbor, Hickam Air Force Base, Schofield Barracks, and Marine Corps Base Hawaii. For military personnel filing bankruptcy in Hawaii:

• Basic Allowance for Housing (BAH) is generally protected as wages
• The Servicemembers Civil Relief Act (SCRA) provides additional protections for active-duty military
• If you're stationed in Hawaii but your home of record is another state, consult with an attorney about which state's exemptions apply

Native Hawaiian Homelands

The Hawaiian Home Lands program provides 99-year leases on land to Native Hawaiians. These leasehold interests have special protections:

• Hawaiian Home Lands leases generally cannot be transferred to creditors
• Improvements on Hawaiian Home Lands may be protected under homestead exemptions
• If you hold a Hawaiian Home Lands lease, consult with an attorney experienced in both bankruptcy and Hawaiian Home Lands law

Hawaii Bankruptcy FAQs

Should I use Hawaii state exemptions or federal exemptions?

The choice depends on your specific assets. Use Hawaii state exemptions if: you have significant professional tools or equipment (unlimited protection), or you're 65+ with home equity between $27,900 and $40,000. Use federal exemptions if: you're a renter (to access the $15,425 wildcard), you're under 65 with limited home equity, or you have a vehicle worth more than $2,575. A Hawaii bankruptcy attorney can analyze your situation and recommend the better option.

How long does Chapter 7 bankruptcy take in Hawaii?

A typical Chapter 7 bankruptcy case in Hawaii takes about 4-6 months from filing to discharge. The 341 Meeting of Creditors usually occurs 30-45 days after filing at the Honolulu courthouse, and the discharge is typically granted 60-90 days after the meeting.

Do I have to travel to Honolulu if I live on an outer island?

Yes, bankruptcy cases for all Hawaiian islands are handled in Honolulu. If you live on Maui, Kauai, Big Island, or another outer island, you'll typically need to travel to Honolulu for the 341 Meeting of Creditors and any additional hearings. This can add significant cost and inconvenience to the bankruptcy process. Some attorneys can attend certain proceedings on your behalf, but you generally must appear personally for the 341 Meeting.

How does Hawaii's high cost of living affect bankruptcy?

Hawaii's high cost of living affects bankruptcy in several ways: (1) Hawaii has the highest median incomes in the nation, making it easier to qualify for Chapter 7 based on income alone; (2) The means test accounts for Hawaii's higher living expenses; (3) Many Hawaii residents are renters due to extreme housing costs, making federal exemptions' wildcard very valuable; (4) Attorney fees are among the highest in the nation.

Are military BAH payments protected in Hawaii bankruptcy?

Yes, Basic Allowance for Housing (BAH) is generally protected as wages in bankruptcy. Additionally, active-duty military personnel have special protections under the Servicemembers Civil Relief Act (SCRA). If you're stationed in Hawaii but your home of record is another state, consult with an attorney about which state's exemptions apply to your case.

What happens to my Hawaiian Home Lands lease in bankruptcy?

Hawaiian Home Lands leases generally have special protections and typically cannot be transferred to creditors. Improvements you've made on Hawaiian Home Lands property may be protected under homestead exemptions. If you hold a Hawaiian Home Lands lease, consult with an attorney experienced in both bankruptcy and Hawaiian Home Lands law.

Can I protect my fishing boat in Hawaii bankruptcy?

Yes, Hawaii state exemptions provide unlimited protection for fishing boats, nets, and other equipment used in your trade or profession. This makes Hawaii state exemptions particularly attractive for commercial fishermen and those in marine-related professions.

Can I file bankruptcy on my own in Hawaii without an attorney?

While it's legally possible to file bankruptcy without an attorney (called filing "pro se"), it's generally not recommended. Hawaii's choice between state and federal exemptions, inter-island travel requirements, and high costs of living create unique complications. Mistakes can result in losing property you could have protected. Most Hawaii attorneys offer free or low-cost initial consultations.

How does bankruptcy affect my credit score in Hawaii?

Bankruptcy will negatively impact your credit score initially, typically dropping it by 130-200 points for those with previously good credit. A Chapter 7 bankruptcy remains on your credit report for 10 years, while Chapter 13 remains for 7 years. Many Hawaii filers find they can qualify for new credit within 2-3 years after discharge.

How much does it cost to file bankruptcy in Hawaii?

The court filing fee is $338 for Chapter 7 and $313 for Chapter 13. Attorney fees in Hawaii are among the highest in the nation, typically ranging from $1,300-$2,400 for Chapter 7 and $3,200-$5,000 for Chapter 13. If you live on an outer island, add the cost of inter-island travel to Honolulu for court appearances.

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