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How to Get Debt Relief in Hawaii

Sarah Edwards | June 05, 2024

Sarah Edwards
Legal Expert
Sarah Edwards, BS

Sarah Edwards is a professional researcher and writer specializing in legal content. An Emerson College alumna, she holds a Bachelor of Science in Communication from the prestigious Boston institution.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Summary: If you're struggling with debt in Hawaii, SoloSuit can help you find the relief you need.

If you're a resident of Hawaii, you're likely battling high property taxes, rental rates, expensive consumer goods, and consumer debt. Hawaii is currently the most expensive state to live in, with a cost index of 193.3.

Rising inflation and gas prices haven't helped matters, and ordinary citizens are feeling the pinch. Apartment rental rates are up 20% compared to last year, leaving many without adequate housing options.

In addition to soaring costs, the average Hawaiian earns an income of $59,760, which is only slightly above the national average of $58,260. Since the average household in Honolulu has $12,429 in credit card debt, it's no wonder people get caught on a hamster wheel of trying to afford their everyday expenses while battling consumer debt.

Fortunately, there are protections in place for Hawaii residents with consumer debt.

How does the Fair Debt Collections Practice Act (FDCPA) protect Hawaii residents?

The FDCPA was first created to protect consumers from unscrupulous debt collection activities. There are a variety of prohibited activities that debt collectors may not engage in. A few examples include:

  • Publicly listing consumers who allegedly refuse to pay debts
  • Causing a telephone to ring continuously with the intent to annoy or harass
  • Using obscene or profane language during a call
  • Implying that they are an attorney when they are not
  • Using deceptive means to collect on a debt

Other debt collection activities may be illegal as well, especially if they seem abusive or are made in an attempt to harass the consumer.

What protections does the state of Hawaii provide?

Each state has its own statute of limitations laws. These laws prevent debt collection agencies and other creditors from suing alleged debtors after a specific amount of time has passed. Statutes of limitations vary depending on the type of debt held. In Hawaii, the statute of limitations sets out the following time limits:


Hawaii Statute of Limitations
on Debt

Debt Type

Deadline in Years

Written

6

Oral

6

On Account

6

Auto Loan

4

Rent

6

Judgments

10 (court of record), 6 (court not of record)


Source: Findlaw

Once the time limit has passed, the creditor or debt collection agency can no longer pursue action against you in court to collect an overdue debt. However, this does not mean that you no longer owe the debt. The creditor may still contact you via phone or mail to try to collect money from you.

If you respond to their communications and confirm that you owe the debt or send any sort of payment, you reset the statute of limitations. This allows the creditor to open a lawsuit against you again.

How can I obtain debt relief in Hawaii?

If you're currently drowning in debt in Hawaii, you're likely seeking relief that can help you make a new start. There are various options you can consider, including debt consolidation loans, home equity loans, and debt settlement.

How do debt consolidation loans work?

Taking out a debt consolidation loan can be a great option for those with decent credit. Generally, you must have a credit score above 650 to qualify for a debt consolidation loan.

If you qualify, you'll be given a sum of money that you can use to pay off all of your current lenders. In exchange, you'll make a single monthly payment to your debt consolidation lender until the loan is paid off.

Debt consolidation loans often carry lower interest rates than credit cards and other types of consumer loans. This can allow you to reduce the overall amount of interest you would pay to your original lenders and shorten the amount of time to pay off your debt.

For example, if you have five different credit cards with a balance of $5,000 each and an APR of 15%, you could obtain a debt consolidation loan for $25,000 with an interest rate of 6%.

If the minimum payments on your credit cards were $120 per month, $62.50 would have gone to interest, while the remaining $57.50 would have paid the outstanding balance.

Under your new debt consolidation loan, the $600 payment that you made towards credit cards would be applied to your loan, with only $125 paid for interest each month. The remaining $475 would reduce your overall balance. That's a savings of $187.50 in interest charges each month.

How can I use equity in my home to pay off debt?

If you're a homeowner, you may be able to obtain a cash-out refinance loan. This allows you to withdraw a specific amount of equity from your house in order to pay off consumer debts. The terms of your mortgage will then be adjusted, and a new interest rate and time period to pay off your house will apply.

This method is similar to a debt consolidation loan, in that you'll pay off all of your creditors with one payment. However, rather than paying a creditor for a debt consolidation loan, you'll be paying back yourself. Interest rates may vary when using this method, so it's important to compare options before tapping into your home's equity.

How does debt settlement work?

Debt settlement involves negotiating with your lenders for a reduced overall balance owed. You may attempt to do this on your own, or you can work with a debt settlement agency that will manage the process for you.

If you decide to work with a debt settlement agency, you may be able to reduce the amounts you owe to your creditors by as much as 50%. However, the debt settlement agency will charge fees for their services. Typically these vary from 15% to 25% of the overall debt.

Debt settlement programs may last anywhere from 12 months to 48 months, depending on the settlement amount and how much you're able to pay monthly.

Utilize these Hawaii debt relief programs

Hawaii has several programs to help its residents who are struggling with debt. Check out these services to see if you qualify:

  • Hawaii Financial Assistance: provides assistance to needy families with (or expecting) children and provides parents with job preparation, work and support services that enable them to leave the program and become self-sufficient. This is accomplished through strategies implemented in the Pursuit of New Opportunities (PONO) welfare reform program which delivers cash assistance and the First-to-Work (FTW) program which provides employment preparation and support services.
  • Med-Quest: provides eligible low-income adults and children access to health and medical coverage through managed care plans.
  • American Consumer Credit Counseling: a not-for-profit agency that offers free credit and housing counseling, debt advice, and other financial services to individuals and consumers nationwide.

Are you being sued for an old debt in Hawaii?

If a creditor has recently filed legal action against you in an attempt to collect a debt, you need to take action.

The first step to winning a debt lawsuit in Hawaii is to respond to the Summons and Complaint by filing a written Answer. In your Answer, you should follow these three steps and file before the deadline:

  1. Reply to each claim listed in the Complaint
  2. Assert your affirmative defenses
  3. File your Answer with the court and send a copy to the plaintiff

Learn more about these three steps from SoloSuit's CEO, George Simons, in this informational video:

https://www.youtube.com/watch?v=TQAKQ0G2KhE

What is SoloSuit?

SoloSuit makes it easy to respond to a debt collection lawsuit.

How it works: SoloSuit is a step-by-step web-app that asks you all the necessary questions to complete your answer. Upon completion, you can either print the completed forms and mail in the hard copies to the courts or you can pay SoloSuit to file it for you and to have an attorney review the document.

Respond with SoloSuit

"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James


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>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

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