Bankruptcy in Hawaii (2026): Exemptions & Means Test

Bankruptcy is a federal process, but in Hawaii the property you keep and the income test that applies to you turn on state-specific rules. Unlike most states, Hawaii lets filers choose between the state exemptions and the federal bankruptcy exemptions, which makes the comparison an important early decision. This page explains Hawaii's exemptions, the Chapter 7 means test, and where cases are filed, as general legal information rather than legal advice.

Does Hawaii use state or federal bankruptcy exemptions?

Federal law lets each state decide whether residents may choose the federal exemption list in 11 U.S.C. 522(d). Hawaii has not opted out, so Hawaii filers may select either the state exemptions in HRS chapter 651 or the federal 522(d) list. You must choose one full set, not mix and match. Many filers compare the two, since the federal list includes a generous wildcard that can protect cash and other assets, while the Hawaii homestead exemption can protect more home equity for older filers or heads of family. If you recently moved to Hawaii, the federal domicile rules in 11 U.S.C. 522(b)(3) may require you to use a prior state's exemptions for a period, which can affect whether the federal option is available to you.

Hawaii homestead exemption

Under HRS 651-92, real property used as a residence is exempt from execution up to a fair market value of $30,000 if the owner is the head of a family or is 65 years of age or older, and up to $20,000 for any other person. HRS 651-91, the definitions section that governs this subpart, defines that real property as the dwelling house in which the owner resides and one parcel of land not to exceed one acre, together with other buildings on it, so the exemption reaches the dwelling plus no more than one acre rather than an unlimited parcel. The protected value is measured over and above all liens and encumbrances recorded before the lien being executed on. Only one exemption may be claimed per parcel. Under HRS 651-96, the proceeds from a sale remain protected for six months, allowing reinvestment in a new home. Because the federal homestead exemption may protect more equity for some filers, the homestead figure is a key part of the state-versus-federal comparison.

Motor-vehicle, personal-property, and wage exemptions

Hawaii's personal-property exemptions appear in HRS 651-121:

• Motor vehicle: one vehicle up to $2,575 of value over and above all liens and encumbrances.
• Household goods and clothing: all necessary household furnishings, appliances, books, and wearing apparel; plus jewelry, watches, and items of personal adornment up to $1,000 in aggregate.
• Tools of the trade: tools, implements, instruments, uniforms, equipment, one commercial fishing boat and nets, and one motor vehicle reasonably necessary to the debtor's trade or business.
• Wages: wages, salaries, commissions, and other compensation for personal services due for the 31 days before the proceeding. Hawaii and federal garnishment limits protect a portion of ongoing earnings.
• Burial plots and insurance proceeds of exempt property are also protected, the latter for six months.

These statutory figures are subject to amendment, so confirm current amounts before relying on them, and remember they apply only if you choose the Hawaii exemptions rather than the federal list.

The Chapter 7 means test in Hawaii

The means test decides whether your income is low enough to file Chapter 7 without a presumption of abuse. The first step compares your household's current monthly income, annualized, to the median family income for a Hawaii household of your size, as published by the U.S. Trustee Program (justice.gov/ust). At or below the median, you generally pass the first step; above it, a detailed calculation of allowed expenses and disposable income applies.

For cases filed on or after July 15, 2026, the U.S. Trustee Program lists Hawaii's median family income as:

• 1 earner: $85,254
• 2 people: $106,202
• 3 people: $123,454
• 4 people: $142,181
• Add $11,100 for each individual in excess of four.

These figures are updated periodically, typically about twice a year, so check the current table for your filing date.

Chapter 7 vs. Chapter 13

Chapter 7 is a liquidation. A trustee may sell non-exempt property to pay creditors, and most remaining unsecured debts are discharged, often within a few months. Because Hawaii filers can choose whichever exemption set protects more property, many keep all of what they own. Chapter 7 suits people with limited income and mostly unsecured debt.

Chapter 13 is a reorganization for people with regular income who want to cure a mortgage or car-loan default, or whose means-test calculation raises a presumption of abuse in Chapter 7. You repay some or all of what you owe through a court-approved plan over three to five years, then receive a discharge of remaining eligible balances.

In both chapters, filing triggers the automatic stay under 11 U.S.C. 362, which immediately stops most collection actions, including foreclosure, repossession, lawsuits, and wage garnishment, while the case proceeds.

Where you file in Hawaii

Hawaii is a single federal district. All bankruptcy cases are filed in the U.S. Bankruptcy Court for the District of Hawaii, located in Honolulu, which serves the entire state.

What bankruptcy can and cannot do

Most unsecured debts, such as credit cards, medical bills, and personal loans, are dischargeable. Some obligations generally are not, including most student loans, recent income taxes, child support and alimony, and debts arising from fraud. Credit counseling from an approved agency is required before filing, and a debtor-education course is required before discharge. Since you must pick one full exemption set, ask a Hawaii lawyer in a free bankruptcy evaluation whether the state or federal list protects more of what you own (attorney advertising).

Frequently Asked Questions

Does Hawaii use state or federal bankruptcy exemptions?

Hawaii lets filers choose. You may use the Hawaii state exemptions in HRS chapter 651 or the federal exemptions in 11 U.S.C. 522(d), but you must pick one full set. The better choice depends on your assets, and recent movers may be limited by the federal domicile rules.

What is the homestead exemption in Hawaii?

Under HRS 651-92, up to $30,000 of equity in a residence for a head of family or a person 65 or older, and up to $20,000 for others, in one parcel of real property. HRS 651-91 limits that property to the dwelling house plus one parcel of land of not more than one acre. The federal homestead exemption may protect more for some filers, which is why the comparison matters.

What is the Hawaii median income for the means test?

For cases filed on or after July 15, 2026, the U.S. Trustee Program lists Hawaii's median family income as $85,254 for 1 person, $106,202 for 2, $123,454 for 3, and $142,181 for 4, adding $11,100 per additional person. These figures update periodically.

Will I lose my house or car in a Hawaii bankruptcy?

Often no. If your home equity fits within the homestead exemption you choose, and your car equity is within the $2,575 state vehicle exemption (or the higher federal vehicle exemption), and you stay current on secured payments, you can typically keep the property. The federal exemption set may protect more for some filers.

Should I use the Hawaii or federal exemptions?

It depends on what you own. The federal list has a large wildcard that helps protect cash and miscellaneous assets, while the Hawaii homestead can protect more home equity for older filers or heads of family. Compare both sets before filing.

Which bankruptcy court handles my Hawaii case?

All Hawaii bankruptcy cases are filed in the U.S. Bankruptcy Court for the District of Hawaii in Honolulu, which covers the entire state.

What is the automatic stay?

The automatic stay under 11 U.S.C. 362 takes effect when you file and immediately stops most collection actions, including foreclosure, repossession, lawsuits, and wage garnishment, while your case is pending.

Can bankruptcy erase all of my debts?

No. Most unsecured debts are dischargeable, but obligations such as most student loans, recent taxes, child support, alimony, and debts from fraud generally are not.