Records of Hawaii Bankruptcy Filings Drop 1 Percent in February

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Records of total Hawaii bankruptcy filings fell to 288 last February from 291 in February last year. There was nearly a 4 percent drop in bankruptcy liquidation cases filed under Chapter 7 from 239 in 2010 to 230 in 2011 while filings under Chapter 13 increased nearly 14 percent. Recorded Chapter 13 bankruptcy filings in 2010 are 51 while there is a total of 58 in 2011. Under Chapter 11 for Business reorganization there was no recorded filing in 2011 with 1 filing in 2010 according to the US Bankruptcy Court Records of the District of Hawaii.

If a homeowner is threatened with foreclosure, as a wage earner he can file bankruptcy under Chapter 13 to work out a plan to pay his loans over a period of three to five years. A Hawaii bankruptcy lawyer is the best person to advice you on your options regarding filing for Chapter 13 bankruptcy. Usually the banks find it costly to modify loans, so going to the bank is not a good option. The federal government has been trying to reduce foreclosures but have not been very successful.

Bankruptcy courts are part of the federal court system and although the bankruptcy code is the same throughout the US, each bankruptcy district controls the procedure for filing documents, calculating deadlines and paying fees. The state median incomes by household size varies per state and each state can choose to use the standard federal property exemptions or drawing up a list of its own exemptions. In Hawaii there is a federal bankruptcy court district located in downtown Honolulu.

The median income for a single wage earner in Hawaii is $52,784 in 2009 and $66,337 for a family of two. An applicant for Chapter 7 bankruptcy must have an income below the median annual income for the corresponding household size under according to a table published by the U.S. Census Bureau. In Hawaii, an initial bankruptcy petition can be filed and the other required documents filed within 15 days. Failure to do so may cause the petition to be dismissed and this cannot be re-filed for 180 days. Then the list of all interested parties and/or creditors has to be submitted and they will get notified.

The Slippery Slope of Credit

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Credit can be a handy financial tool. It makes it possible to use the money of others (sometimes even interest free) while leaving your own money in the bank earning interest. Used in the best possible situations, credit can even make money and not just save it for the user.

The problems begin when the credit is not monitored or maintained with extreme scrutiny. A house of financial credit cards can tumble into chaos with just a few wrong moves. Recognizing the slippery slope of credit can help you keep from sliding down into the financial hole of out-of-control debt.

Signs that the Credit Situation is Heading Downhill

1.     The balance is not paid in full. It starts with just leaving a little balance each month. As things get tougher, the balance that rolls over continues to grow.  Soon there is no way to pay the balance in full because the amount has expanded beyond a controllable limit.

2.     New credit accounts are opened to pay off old credit. The concept is sound. Moving a high interest balance to a zero interest account. The problem starts when the new balance is not aggressively paid down to avoid the cost of interest that will occur down the road. Simply rotating balances is a sure sign that the slippery slope of credit is near.

3.     Credit accounts are used with the anticipation of money. Purchases are being made before money is available to cover the costs. When expected income does not become a reality then the credit accounts begin to build up balances and also incur high interest costs.

4.     Regular bills are being covered by credit accounts. Credit can be the easy alternative when the money for ordinary expenses comes up short. Leaning on credit instead of making tough cuts into the budget often leaves you sliding down into a debt hole that could have avoided just a few decisions back.

Tough times can call for tough decisions. Credit accounts make it possible to put off dealing with financial problems, but they quickly lead to even more troubles of their own. Too much trust placed on credit accounts leads down a slippery slope that ends in credit rating problems or a deep, debt hole that could take years to climb out.

Recover from Credit Issues

  • Stop using credit accounts completely. Some people have to just put all credit cards away. Others have to cut them up to keep them out of reach. Do what it takes to stop using the credit before the credit slides out of control and becomes a problem to tough to handle.
  • Ask for help. The sooner you ask then the easier the path to recovery will be in most situations. You may only need to contact the people that you owe to adjust payments, or it may be time to seek help with a financial professional to get your money situation back on track.
  • Make necessary changes. Tougher financial times require tighter decisions with the money. Stop spending on anything that is absolutely necessary until the budget situation has resolved.

Credit can be your friend. It provides a way to get what you want without using what you have – at least on a temporary basis. The problems start to rise up when credit becomes the fixing agent for financial troubles or the magic answer to all possible problems.

Avoid the slippery slope of credit by recognizing the danger signs. Take the steps to nip the problems in the bud. Keeping control of credit instead letting runaway credit control you will allow you to make the most of your financial choices.

Mark has been in the personal finance industry for 3 years; he currently helps people get a free credit score report and gives tips about where to find the best online brokers.