Hawaii Bankruptcy Exemptions

Laws which protect a debtor’s property when personal bankruptcy is filed in the state of Hawaii.

§ 651-91 Definitions As used in this subpart:

(1) “Head of a family” includes within its meaning:

(A) A man and woman when married, except as provided in section 651-93.
(B) Every individual who is residing on the real property and who has under his or her care or maintenance, either:

(i) His or her minor child, or minor grandchild, or the minor child of his or her deceased wife or husband;
(ii) A minor brother or sister, or the minor child of a deceased brother or sister;
(iii) A father, mother, grandfather, or grandmother;
(iv) The father, mother, grandfather, or grandmother of a deceased husband or wife;
(v) An unmarried brother, sister, or any other of the relatives mentioned in this subparagraph, who have attained the age of majority.

(C) Head of household as defined in section 2(b) of the Internal Revenue Code of 1954, as amended.

(2) “Long-term lease” means a lease for twenty years or more.
(3) “Owner” means an individual who has an interest in real property.
(4) “Person” means any individual under sixty-five years of age other than the head of a family.
(5) “Real property” consists of the dwelling house in which the owner resides and one parcel of land not to exceed one acre, upon which it is situated together with other buildings thereon. This parcel may be in fee simple or any other interest in real property which vests the immediate right of possession, even though such right of possession is not exclusive, and includes land held under long-term lease, ownership rights in a condominium or stock cooperative unit.

§ 651-92 Real property exempt.

(1) Real property shall be exempt from attachment or execution as follows:

(1) An interest in one parcel of real property in the State of Hawaii of a fair market value not exceeding $30,000 owned by the defendant who is either the head of a family or an individual sixty-five years of age or older.
(2) An interest in one parcel of real property in the State of Hawaii of a fair market value not exceeding $20,000 owned by the defendant who is a person.

The fair market value of the interest exempted in paragraphs (1) or (2) shall be determined by appraisal and shall be an interest which is over and above all liens and encumbrances on the real property recorded prior to the lien under which attachment or execution is to be made. Not more than one exemption shall be claimed on any one parcel of real property even though more than one person residing on such real property may otherwise be entitled to an exemption.
Any claim of exemption under this section made before May 27, 1976, shall be deemed to be amended on May 27, 1976, by increasing the exemption to the amount permitted by this section on May 27, 1976, to the extent that such increase does not impair or defeat the right of any creditor who has executed upon the real property prior to May 27, 1976.

(2) No exemption authorized under this section shall apply to process arising from:

(1) A lien as provided by section 507-42;
(2) A lien or security interest created by a mortgage, security agreement, or other security instrument;
(3) A tax lien in the name of the federal or state government;
(4) An improvement district lien of any county of the State; or
(5) A lien or encumbrance recorded against the real property prior to the acquisition of interest in and commencement of residence on such real property.

§ 651-96 After sale, money equal to real property exemption protected.
The money paid to the defendant as the defendant’s exemption shall be entitled, for the period of six months thereafter, to the same protection against attachment and execution which section 651-92 gives to the real property. If the defendant, within such six-month period, applies such proceeds to the purchase of real property, the date of such acquisition and commencement of residence for the purpose of section 651-92(b)(5), shall be considered to be the date of the acquisition of interest in and commencement of residence on the real property whose sale resulted in such proceeds.

§ 651-121 Certain personal property and insurance thereon, exempt.
The following described personal property of an individual up to the value set forth shall be exempt from attachment and execution as follows:

(1) All necessary household furnishings and appliances, books and wearing apparel, ordinarily and reasonably necessary to, and personally used by a debtor or the debtor’s family residing with the debtor; and, in addition thereto, jewelry, watches, and items of personal adornment up to an aggregate cash value not exceeding $1,000.
(2) One motor vehicle up to a value of $2,575 over and above all liens and encumbrances on the motor vehicle; provided that the value of the motor vehicle shall be measured by established wholesale used car prices customarily found in guides used by Hawaii motor vehicle dealers; or, if not listed in such guides, fair wholesale market value, with necessary adjustment for condition.
(3) Any combination of the following: tools, implements, instruments, uniforms, furnishings, books, equipment, one commercial fishing boat and nets, one motor vehicle, and other personal property ordinarily and reasonably necessary to and personally owned and used by the debtor in the exercise of the debtor’s trade, business, calling, or profession by which the debtor earns the debtor’s livelihood.
(4) One parcel of land, not exceeding two hundred fifty square feet in size, niche or interment space owned, used, or occupied by any person, or by any person jointly with any other person or persons, in any graveyard, cemetery, or other place for the sole purpose of burying the dead, together with the railing or fencing enclosing the same, and all gravestones, tombstones, monuments, and other appropriate improvements thereon erected.
(5) The proceeds of insurance on, and the proceeds of the sale of, the property in this section mentioned, for the period of six months from the date the proceeds are received.
(6) The wages, salaries, commissions, and all other compensation for personal services due to the debtor for services rendered during the thirty-one days before the date of the proceeding.

§ 88-91 Exemption from taxation and execution.
The right of a person to a pension, an annuity or a retirement allowance, to the return of contributions, the pension, annuity or retirement allowance itself, any optional benefit or death benefit, any other right accrued or accruing to any person under this part and the moneys in the various funds created under this part are exempted from any tax of the State and, except as in section 88-92 provided, shall not be subject to execution, garnishment or any other process and shall be unassignable except as in this part specifically provided.

§ 88-169 Payments of pensions; inalienable.
If at any time there should not be sufficient money to the credit of the pension system to pay all claims against it in full, claims on account of the death of members of the police force, fire department, or band, shall be paid first in full with as little delay as possible, after which an equal percentage shall be paid upon all other claims to the full extent of the funds on hand until the funds be replenished so as to pay them in full. All pensions shall be paid by the treasurer at the treasurer’s office at the same time and in such installments as the members of the police force, fire department, or band are paid. All pensions granted and payable out of the pension system shall be exempt from seizure or levy upon attachment, execution, supplemental process, and all other process whether mesne or final and shall not be subject to sale, assignment, or transfer by any beneficiary.

§ 346-33 Assistance payments inalienable.
(Assistance payments and compensation paid by the department of human services to blind persons and other persons for work performed in their homes or in workshops shall be inalienable by any assignment, sale, attachment, garnishment, execution, or otherwise.

§ 351-66 Exemption from execution (crime victims’ compensation).
No compensation payable under this chapter shall, prior to actual receipt thereof by the person or beneficiary entitled thereto, or their legal representatives, be assignable or subject to execution, garnishment, attachment, or other process whatsoever, including process to satisfy an order or judgment for support or alimony.

§ 383-163 No assignment of benefits; waiver (Unemployment compensation).
No assignment, pledge, or encumbrance of any right to benefits which are or may become due or payable under this chapter shall be valid and the right to benefits shall not be subject to levy, execution, attachment, garnishment, or any other remedy for the collection of debt. No waiver of this section shall be valid, except that this section shall not apply to:

(1) Section 383-163.5 with respect to the withholding and deduction of benefits for the payment of child support obligations;
(2) Section 383-163.6 with respect to the voluntary withholding and deduction of benefits for payment of federal and state income taxes; and
(3) Section 383-163.7 with respect to the withholding and deduction of benefits for repayment of uncollected overissuances of food stamp coupons.

§ 386-57 Legal status of right to compensation and compensation payments (Workers’ compensation).

(a) The right to compensation under this chapter shall not be assignable, and the right to compensation and compensation payments received shall be exempt from the reach of creditors.
(b) The right to compensation under this chapter shall have the same status as a lien or the same priority for the whole thereof with respect to the assets of the employer as are accorded by law to any unpaid wages for labor.

§ 392-29 No assignment of benefits; exemptions from attachment, etc. (Temporary disability benefits)
No assignment, pledge, or encumbrance of any right to benefits which are or may become due or payable under this chapter shall be valid; and such rights to benefits shall be exempt from levy, execution, attachment, garnishment, or any other remedy whatsoever provided for the collection of debt. No waiver of any exemption provided for in this section shall be valid.

§ 431:10-231 Exemption of proceeds; accident and health or sickness.
The proceeds of all contracts of accident and health or sickness insurance and of provisions providing benefits on account of the insured’s disability which are supplemental to life insurance or annuity contracts shall be exempt from all liability for any debt of the insured, and from any debt of the beneficiary existing at the time the proceeds are made available for the beneficiary’s use.

§ 431:10-232 Exemption of proceeds; life, endowment and annuity.

(a) All proceeds payable because of the death of the insured and the aggregate net cash value of any or all life and endowment policies and annuity contracts payable to a spouse of the insured, or to a child, parent or other person dependent upon the insured, whether the power to change the beneficiary is reserved to the insured or not, and whether the insured or the insured’s estate is a contingent beneficiary or not, shall be exempt from execution, attachment, garnishment, or other process, for the debts or liabilities of the insured incurred subsequent to May 19, 1939, except as to premiums paid in fraud of creditors within the period limited by law for the recovery of such payments.
(b) When the terms of any life or endowment policy or annuity contract require that the proceeds thereof be retained by the insurer upon the death of the insured, or other maturity of the policy or contract, for payment to any beneficiary other than the insured in accordance with a settlement plan selected by the insured, the beneficiary shall have no right or power, nor shall the beneficiary be permitted by any insurer, to commute, encumber, assign, or otherwise anticipate the beneficiary’s interests under the plan if the right or power is expressly denied the beneficiary by the terms of the contract or policy. If the beneficiary under the settlement plan is or was the spouse of the insured, or a child, parent or other person dependent upon the insured, the beneficiary’s interests thereunder, in any case, shall be exempt from execution, attachment, garnishment, or other process for the beneficiary’s debts or liabilities incurred after December 31, 1955.
(c) This section does not apply to group life insurance.

§ 651-92 Real property exempt
(a) Real pro

§ 431:10-233 Exemption of proceeds; group life.

(a) A policy of group life insurance or the proceeds thereof payable to the individual insured or to the beneficiary thereunder, shall not be liable, either before or after payment, to be applied to any legal or equitable process to pay any liability of any person having a right under the policy. The proceeds of the policy, when not made payable to a named beneficiary or to a third person pursuant to a facility-of-payment clause, shall not constitute a part of the estate of the individual insured for the payment of the insured’s debts.
(b) This section shall not apply to group life insurance policies issued under section 431:10D-203 to the extent that the proceeds are applied to payment of the obligation for the purpose of which the insurance was so issued.

§ 431:10-234 Spouses’ and reciprocal beneficiaries’ right in life insurance policy.

(a) Every life insurance policy made payable to or for the benefit of the spouse or the reciprocal beneficiary of the insured, and every life insurance policy assigned, transferred, or in any way made payable to a spouse or reciprocal beneficiary, or to a trustee for the benefit of a spouse or a reciprocal beneficiary, regardless of how the assignment or transfer is procured, shall, unless contrary to the terms of the policy, inure to the separate use and benefit of such spouse or reciprocal beneficiary.
(b) Without the consent of one’s spouse or reciprocal beneficiary, a married person or an individual who is registered as a reciprocal beneficiary, may contract, pay for, take out, and hold a policy on the life or health of one’s spouse, reciprocal beneficiary, or children, or against loss by such spouse, or reciprocal beneficiary, or children due to disablement by accident. Premiums paid on the policy by a married person or reciprocal beneficiary shall be held to have been that person’s separate estate, and the policy shall inure to the use and benefit of that person and that person’s children, free from any claim by the spouse, or reciprocal beneficiary, or others.

§ 431:10D-112 Policy settlements.
Any life insurer shall have the power to hold under agreement the proceeds of any policy issued by it, upon such terms and restrictions as to revocation by the policyholder and control by beneficiaries, and with such exemptions from the claims of creditors of beneficiaries other than the policyholder as set forth in the policy or as agreed to in writing by the insurer and the policyholder. Upon maturity of a policy in the event the policyholder has made no such agreement, the insurer shall have the power to hold the proceeds of the policy under an agreement with the beneficiaries. The insurer shall not be required to segregate funds so held but may hold them as part of its general assets.

§ 432:2-403 Benefits not attachable.
No money or other benefit, charity, relief or aid to be paid, provided or rendered by a society, shall be liable to attachment, garnishment or other process, or to be seized, taken, appropriated or applied by any legal or equitable process or operation of law to pay any debt or liability of a member or beneficiary, or any other person who may have a right thereunder, either before or after payment by the society.

§ 651-124 Pension money exempt.
The right of a debtor to a pension, annuity, retirement or disability allowance, death benefit, any optional benefit, or any other right accrued or accruing under any retirement plan or arrangement described in section 401(a), 401(k), 403(a), 403(b), 408, 408A, 409 (as in effect prior to January 1, 1984), 414(d), or 414(e) of the Internal Revenue Code of 1986, as amended, or any fund created by the plan or arrangement, shall be exempt from attachment, execution, seizure, the operation of bankruptcy or insolvency laws under 11 United States Code section 522(b), or under any legal process whatever. However, this section shall not apply to:

(1) A “qualified domestic relations order” as defined in section 206(d) of the Employee Retirement Security Act of 1974, as amended, or in section 414(p) of the Internal Revenue Code of 1986, as amended; and
(2) Contributions made to a plan or arrangement within the three years before the date a debtor files for bankruptcy, whether voluntary or involuntary, or within three years before the date a civil action is initiated against the debtor, except for contributions to a retirement plan established by state statute if the effect would be to eliminate a state employee’s retirement service credit.

§ 653-3 Exemptions; pensions..
No pension to which any person is entitled from the State, or any municipal subdivision thereof, shall be subject to taxes nor to garnishment, attachment, or execution upon or in any suit, action, or proceeding at law instituted by any person or by the State or by any municipal subdivision thereof.

§ 653-4 Further exemption.
The wages received by every person receiving less than $60 per month when paid from any unemployment work relief fund, the expenditure of which is under the control of any state commission, board, or other agency, or under the control of any county or any commission, board, or other agency of any county shall be exempt from garnishment, attachment, or any other judicial or statutory proceedings for the taking, sequestration, or withholding thereof for any purpose whatsoever, including payment of taxes.

Note: While this reference information is current as of August 2010, it may not reflect the most up-to-date exemption figures on official state of Hawaii bankruptcy court statutes.

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