If you're considering filing for bankruptcy, the Hawaii homestead exemption will help you protect the equity in your house. This article explains how much home equity allowed in Hawaii using a homestead exemption and how to apply it in bankruptcy.
Hawaii lets filers use either the federal exemption system or Hawaii's state exemption system. However, you can't mix exemptions from both lists, so you'll want to select the system that will protect your most important assets.
We've listed the state and federal exemption amounts below to help you make an informed choice. We've also included links to extensive federal and state exemption lists to help you decide which set will work best.
Federal Homestead Exemption |
Hawaii Homestead Exemption |
|
Homestead exemption amount |
$31,575 |
Until December 31, 2025, $20,000; $30,000 head of family or 65. (Possibly increasing to $90,000 on January 1, 2026, regardless of status). |
Can spouses who file a joint bankruptcy double the exemption? |
$63,150 is available to spouses who co-own property. |
No. |
Homestead exemption law |
11 U.S.C. § 522(d)(1) (statute doesn't include updated exemption amount) |
|
Other information |
Amounts will adjust on April 1, 2028. |
See below. |
Compare other federal and state exemptions. |
In Hawaii, the homestead exemption applies to real property, including your home and condominium. You must reside on the property. You might have further protection if you hold property as tenancy by entirety with your spouse.
For example, if one spouse files for bankruptcy—not both—the bankruptcy trustee might be prevented from using the property equity to pay off debts. However, this is a tricky area of law. Before filing, talk with a local bankruptcy attorney to ensure you don't lose valuable property.
If you can't protect all of your home equity, you might not be able to keep your home. Typically, the Chapter 7 trustee appointed to your case would sell the house, return the exemption amount to you, pay off the mortgage, and pay creditors with the amount remaining after deducting the trustee's fee.
In Chapter 13, the trustee doesn't sell property, so you could keep it. However, that doesn't mean Chapter 13 filers get a break regarding how much equity they can retain. Instead, you'd need to pay creditors the value of the nonexempt equity through the Chapter 13 plan.
But that isn't all. Keeping your home requires being current on the mortgage when filing for Chapter 7. Otherwise, you could lose it to the lender through foreclosure, possibly even during the Chapter 7 case. If you're behind on payments when filing for Chapter 13, you have an option not available in Chapter 7. You can catch up on the payments over time through the plan.
Learn about other requirements you must meet in Your Home in Chapter 7 and Your Home in Chapter 13. Also, find out why filing for Chapter 13 is better than Chapter 7 when you're behind on payments and don't want to lose your house.
When completing your bankruptcy forms, you'll do the following:
Because your home is likely your most valuable asset, consider consulting with a bankruptcy lawyer to ensure you can protect it in bankruptcy.
Hawaii's homestead exemption is in the Hawaii state statutes at Haw. Rev. Stat. § 651-91 on the Hawaii State Legislature website (use the "Hawaii Revised Statutes" search function in the left navbar). Learn about finding state statutes in Laws and Legal Research.
You can file for bankruptcy in Hawaii after living there for over 180 days. However, you must live in Hawaii for at least 730 days before filing to use the current state's exemptions. Otherwise, you'd use the previous state's exemptions.
If you lived in multiple states during the two years before filing for bankruptcy, you'd use the exemptions of the state you lived in for most of the 180 days before the two years immediately preceding your filing. (11 U.S.C. § 522(b)(3)(A).)
Learn more about filing for bankruptcy after moving to a new state, the current amount of the federal cap, and other essential exceptions to homestead exemptions. Also, spouses can double some exemption amounts if both parties own the property, but not all of them. Learn about other filing considerations for spouses.
Did you know Nolo has made the law accessible for over fifty years? It's true, and we wholeheartedly encourage research and learning. You can find many more helpful bankruptcy articles on Nolo's bankruptcy homepage. Information needed to complete the official downloadable bankruptcy forms is on the Department of Justice U.S. Trustee Program website.
However, online articles and resources can't address all bankruptcy issues and aren't written with the facts of your particular case in mind. The best way to protect your assets in bankruptcy is by hiring a local bankruptcy lawyer.