Hawaii bankruptcy law provides exemptions that allow individuals to keep property up to a specific amount. As of 2012, jewelry and articles of adornment in Hawaii bankruptcy cases have an exemption of up to $1,000. This exemption is generally enough to allow someone to keep their wedding bands. More valuable jewelry such as mothers' jewelry, heirloom jewelry, engagement rings and other jewelry can be kept if the total value of the
desired items is less than $1,000. This number is a total of all items that can be kept, not permission to keep all jewelry items worth less than $1,000.
Family jewelry does not always have to be lost to the family. Contact a Honolulu bankruptcy lawyer. You may be able to sell treasured jewelry to family members at market value. The money from these relatives then goes toward payment of your bills and remains in the family. This should only be done under legal guidance. Giving away jewelry to adult children, giving family jewelry back to your parents or omitting it from the assets list in the bankruptcy petition can result in charges of bankruptcy fraud.
While protecting family jewelry is an honorable intent, bankruptcy fraud can result in revocation of the bankruptcy case, loss of bankruptcy protection, renewed collections efforts and even criminal charges. While wildcard exemptions have been used in other states to allow more valuable jewelry to be kept, Hawaii bankruptcy law does not grant a wildcard exemption. If a family member has been planning to give you family jewelry but has not given it at this time, the jewelry remains their property. In this case, family members with ownership of family jewelry should wait until after the bankruptcy is discharged before passing on family jewelry.
What if you do not like the Hawaii bankruptcy exemptions? Then you can consider filing for bankruptcy under federal bankruptcy law. Federal law exempts jewelry up to $1,150 in value. An additional $925 in wildcard exemptions can also be used in any category exemption. If you file under federal bankruptcy law and use the entire wildcard exemption toward jewelry, you could keep jewelry up to $2,075 in value. However, federal exemptions in other categories such as homestead exemptions and tools of the trade are lower than Hawaii's exemptions, and Hawaii does not let you pick and choose which exemptions to use, federal or state. You should always consult with a Honolulu bankruptcy lawyer to determine which bankruptcy filing is best for your particular situation and desired outcome.
These exemptions only apply to liquidation bankruptcies. If you entering a debt repayment plan under the bankruptcy court's supervision, you may be able to pay your creditors without selling any jewelry. The possible exception is if you have an outstanding debt with the jeweler. Just as a debtor may have to return the car to settle the auto loan, someone may be forced to return jewelry which was bought on store credit with the jeweler. If you are entering a debt repayment plan, you can generally keep your jewelry while remaining free to sell chosen items to raise money to pay down your debts. This is especially true for old and broken gold, since selling gold chains to raise money can accelerate your debt payment plan while helping you retain ownership of wedding rings, engagement rings or heirloom jewelry. Discuss your case with a bankruptcy attorney to find out if you can, indeed, keep your family jewelry.
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