Hawaii bankruptcy exemptions

What can you keep in a Hawaii bankruptcy?

If Hawaii law governs your exemption choice, you can generally choose Hawaii exemptions or the federal bankruptcy exemption list. Hawaii has not opted out of the federal list. You cannot combine Hawaii’s home exemption with the federal car allowance or wildcard. The choice is between systems under 11 U.S.C. § 522(b).

The state rules protect up to $30,000 in qualifying home equity for a head of a family or someone age 65 or older, or $20,000 for another individual, and $2,575 in one vehicle’s equity. The federal list has larger home and vehicle dollar limits plus a flexible wildcard. But state protections for necessary work equipment, household property, and certain insurance interests can matter too. Compare your whole asset list, not just your largest debt.

In chapter 7, exemptions help determine what a trustee could sell to pay creditors. In chapter 13, nonexempt value can affect the minimum paid to unsecured creditors, alongside income and other plan requirements. An exemption does not erase a mortgage or other valid lien. See the Hawaii bankruptcy court’s debtor guidance, § 1325(a)(4), and § 522(c).

Living in Hawaii today does not settle the choice

The usual rule looks to your domicile throughout the 730 days before filing. Domicile means your legal home. If you were not domiciled in one state for that entire period, look to the 180 days immediately before those 730 days and the place where you were domiciled for the longer portion than anywhere else. If that rule leaves you ineligible for any exemption, the federal list is available as a fallback. See § 522(b)(3)(A).

A recent move from an opt-out state may change your options even if you file in Hawaii. Write down your move dates before comparing the amounts. The exemption law finder can help organize that history; the applicable state’s residency restrictions still need review.

Choosing the state-law alternative does allow applicable federal protections outside § 522(d), plus qualifying retirement funds and certain entireties interests under § 522(b)(3). That is different from adding federal-list allowances to state exemptions. Exemptions also do not determine whether you qualify for chapter 7; the means test addresses a separate issue.

Compare the two systems across your property

These are selected protections, not a complete exemption schedule. Dollar limits generally protect your equity: the value of your ownership interest after applicable liens. Do not count the same equity twice.

Federal amounts apply to cases filed on or after April 1, 2025, under the Judicial Conference’s 2025 adjustment notice; the next scheduled adjustment is April 1, 2028 under § 104. Hawaii’s state figures above are those in the current linked HRS compilation checked October 9, 2026. They are not the proposed increases in legislative bills.

Home protection depends on the property and its title

HRS § 651-91 defines the covered real property as the dwelling where the owner resides and one parcel of land of no more than one acre, with its other buildings. It includes qualifying condominium and stock-cooperative ownership and long-term leases of at least 20 years. “Head of a family” includes married individuals and specified family, support, and head-of-household relationships. Divorce or separation orders need review under HRS § 651-93; informally living apart does not automatically create an extra allowance.

Under HRS § 651-92, the $30,000 or $20,000 limit applies above qualifying prior liens. Spouses cannot double this state exemption on the same parcel. The statute also excepts mortgages, specified construction liens, tax liens, county improvement-district liens, and certain preexisting encumbrances.

HRS § 651-96 protects the exempt amount paid to the debtor after an execution sale for six months. Reinvestment in qualifying property within that window has a specific timing rule. This does not promise protection for every dollar from a voluntary sale. Review the transaction and tracing before relying on proceeds protection.

Tenancy by the entirety is a separate ownership issue

Property held in a valid tenancy by the entirety can be protected from a creditor of only one spouse during the spouses’ joint lives under Sawada v. Endo, 57 Haw. 608 (1977). It remains available to joint creditors. The Hawaii bankruptcy court applied that distinction in In re DiStefano, amended decision of March 3, 2025. It treated § 522(b)(3)(B) separately from the domicile rule and looked to Hawaii law for Hawaii real estate.

Marriage or ordinary joint ownership alone does not establish entireties protection. Federal tax liens can reach a spouse’s entireties interest despite state-law immunity, as United States v. Craft, 535 U.S. 274 (2002) explains. Changing title to hinder creditors can also jeopardize protection.

Trust ownership needs a closer look. The Ninth Circuit’s Security Pacific Bank Washington v. Chang, 80 F.3d 1412 (1996) reversed the older district-court ruling and allowed a creditor to reach property after the trust transfers at issue. Hawaii amended HRS § 509-2 in 2012 to preserve separate-creditor immunity for qualifying transfers of entireties real estate to specified revocable trusts.

The statute has conditions involving the continuing marriage or registered reciprocal-beneficiary relationship, trust ownership and beneficiaries, trust names, recorded notice, and any waiver. Divorce, annulment, or termination of that registered relationship ends the immunity. Have the deed, transfer date, trust documents, exemption choice, and each creditor’s claim reviewed before relying on this protection.

A car and cash can make the choice more concrete

Necessary household and work property has conditions

The state household rule requires ordinary and reasonable necessity and personal use. It does not automatically protect every collectible, luxury item, or spare appliance. Work property under HRS § 651-121(3) can include tools, uniforms, books, equipment, one commercial fishing boat and nets, and one motor vehicle. You must personally own and use the property to earn your livelihood. An ordinary commuter car is not automatically an unlimited work-vehicle exemption.

HRS § 651-121(4)–(5) also covers a qualifying burial parcel up to 250 square feet, niche or interment space, and specified improvements, plus insurance or sale proceeds of the personal property listed in that section for six months after receipt. Keep records identifying what was sold or insured and where the money went.

Personal-property exemptions do not automatically remove valid liens. HRS § 651-122 limits the state protection in specified collection proceedings, while bankruptcy has its own governing rules, including § 522(c). A state collection exception is not, by itself, permission to collect despite bankruptcy.

A business interest is different from its equipment. A partner does not co-own specific partnership assets under HRS § 425-126, but the partner’s transferable interest is personal property under HRS § 425-127. That distinction does not create a blanket bankruptcy exemption for a partnership interest. Disclose business ownership and have it valued.

Unpaid wages, deposited pay, and benefits are different

HRS § 651-121(6) covers compensation due to you for services rendered during the 31 days before the proceeding. Do not treat it as protection for every paycheck already deposited in your bank account. The payment date, work period, and form in which you hold the money matter.

Hawaii’s garnishment formula in HRS § 652-1 is a separate collection rule, subject to applicable federal garnishment limits. It is not an automatic second exemption tier that begins when wages become 32 days old. A bankruptcy asset review needs to identify the actual exemption for the money held when you file.

• Public assistance: HRS § 346-33 protects assistance payments and covered compensation paid by the Department of Human Services for home or workshop work.
• Unemployment: HRS § 383-163 protects the right to benefits, with express exceptions for child-support deductions, voluntary income-tax withholding, and recovery of specified food-stamp overpayments.
• Workers’ compensation: HRS § 386-57 protects the right to compensation and payments received from creditors. Support obligations require separate analysis; the statute’s case notes identify a child-support exception.
• Temporary disability: HRS § 392-29 protects rights to benefits under Hawaii’s statutory temporary-disability program. This is separate from private insurance proceeds.
• Social Security: 42 U.S.C. § 407 separately protects covered benefits, including paid benefits, subject to specific federal exceptions. Keep records tracing deposits rather than assuming the entire account shares that protection.

Two narrower provisions should not be mistaken for general wage allowances: HRS § 653-4 concerns wages from specified unemployment work-relief funds for someone receiving less than $60 a month; HRS § 353-22 concerns a committed person’s earnings held by the department, subject to § 353-22.5.

A three-year state rule is not the whole retirement analysis

HRS § 651-124 protects qualifying retirement arrangements described in specified Internal Revenue Code sections and Hawaii ABLE accounts. Its exceptions include qualified domestic relations orders and contributions made within three years before bankruptcy or a civil action, with an exception for certain state-plan service credits. This is broader than an “ERISA benefits” label and more qualified than “all retirement money is exempt.”

Federal protection must be analyzed separately. An enforceable anti-alienation restriction in an ERISA-qualified pension plan can exclude the interest from the estate under § 541(c)(2); see Patterson v. Shumate, 504 U.S. 753 (1992). Hawaii’s Supreme Court also held that ERISA overrides the state contribution exception to the extent they conflict in Ditto v. McCurdy, 90 Hawai‘i 345 (1999).

Qualifying tax-exempt retirement funds also receive protection under § 522(b)(3)(C) or § 522(d)(12). The state three-year contribution exception is not a universal waiting period for federal retirement protection. Plan qualification, distributions, and rollovers still matter.

The federal aggregate limit for covered traditional and Roth IRA funds is $1,711,975 for cases filed on or after April 1, 2025, subject to § 522(n) and the adjustment notice. SEP and SIMPLE IRAs and specified rollover amounts and their earnings are excluded from that cap; a court may increase it in the interests of justice. It is not a cap on every retirement plan. Inherited IRAs need separate review: Clark v. Rameker, 573 U.S. 122 (2014) rejected the federal retirement-funds exemption for the inherited IRA at issue.

State and municipal pensions also have specific protections under HRS § 88-91 and HRS § 653-3. Section 88-91 incorporates exceptions for specified government misappropriation claims under HRS § 88-92 and qualifying divorce distributions under HRS § 88-93.5. HRS § 88-169 addresses pensions from the police, fire, and band pension system covered by that part. Match your actual plan to the rule before withdrawing funds to pay debt.

Insurance protection turns on who owns and receives it

Bring the policy, beneficiary designation, cash-value statement, and settlement terms. “Life insurance” or “annuity” alone does not identify whose creditors are barred.

• Accident, health, sickness, and supplemental disability proceeds: HRS § 431:10-231 protects covered proceeds from the insured’s debts and from beneficiary debts existing when proceeds become available.
• Life, endowment, and annuity interests: HRS § 431:10-232 protects specified death proceeds and aggregate net cash value payable to a spouse, child, parent, or other dependent, against covered debts of the insured. Fraudulent premiums are excepted. Subsection (b) separately addresses insurer-held settlement-plan interests and beneficiary debts; subsection (c) excludes group life from this section.
• Group life: HRS § 431:10-233 protects qualifying policies and proceeds before or after payment, with an exception for specified creditor-group coverage applied to its underlying obligation.
• Family policy ownership and settlement agreements: HRS § 431:10-234 governs spouses’ and reciprocal beneficiaries’ separate policy rights. HRS § 431:10D-112 permits certain insurer-held settlement protections under policy terms or written agreements. Neither is an automatic exemption for every family-owned policy or payout.
• Fraternal benefits: HRS § 432:2-403 protects covered society benefits before or after payment.

Under the federal list, unmatured life contracts, cash or loan value, and dependent-beneficiary death proceeds have different rules in § 522(d)(7), (8), and (11)(C). Do not substitute a state insurance protection after electing the federal list.

Build the comparison before changing your property

1. List what you own, including shared property, accounts, business interests, expected tax refunds, and legal claims. Identify the bankruptcy-estate interest under § 541.
2. Document current values, liens, your ownership share, and the dates and sources of deposits. Separate ordinary savings from benefits or proceeds that require tracing.
3. Compare both systems with any applicable domicile restrictions. Claim the chosen exemptions on Schedule C, as required by § 522(l).

Get advice before transferring title, giving away property, selling an asset, or using retirement money to pay creditors. Those steps can change both the property you have and the legal protection available.

Common questions

FAQ authorities: § 522(b), (d), (l), and (m), § 541, and HRS § 651-92.