Hawaii tax overhaul could affect debt repayment plans

Blake Goodman, P.C. says Hawaii’s new Act 24 could change how some households budget for debt payments, bankruptcy plans and expected tax refunds. The law, signed May 21, 2026, revises future tax bracket and rate adjustments and phases out certain credits as residents face tighter household finances. Why it matters: - Hawaii households with credit card debt, personal loans, medical bills or mortgage obligations may need to recalculate monthly budgets. - Changes in take-home pay, tax credits and refund expectations can affect whether families can keep up with debt payments or need legal debt relief. - For Chapter 13 filers, updated tax numbers can affect repayment-plan calculations and long-term affordability. What happened: - Governor Josh Green signed Senate Bill 3125, now Act 24, into law on May 21, 2026. - The law revises certain future tax bracket and rate adjustments. - Act 24 also sunsets selected tax credits. - Blake Goodman, P.C. is urging Hawaii residents to review how the change may affect budgets and repayment plans. The details: - Founding attorney Blake Goodman, a former Certified Public Accountant, said tax planning and debt management are closely connected. - Goodman said changes in brackets, rates and credits can alter monthly take-home income. - The firm says Act 24 is especially relevant in three areas: disposable income in Chapter 13 plans, reliance on tax credits or refunds to pay bills, and the need to evaluate formal debt relief. - If projected take-home income changes, Chapter 13 repayment plans should be reviewed to stay realistic and sustainable. - Households that use year-end refunds or expected tax credits to reduce balances or avoid collections may need to adjust that strategy. - The firm recommends comparing estimated take-home income with fixed monthly expenses, minimum debt payments and past-due obligations. - Goodman said the goal is long-term recovery and that legal debt relief may be worth discussing if minimum debt payments still exceed available income. Between the lines: - Act 24 will not affect every household the same way. - The impact depends on income level, filing status, available credits, debt type and whether a consumer is already in a repayment plan, collection matter or bankruptcy case. - Hawaii’s cost of living adds pressure to the budget questions the law raises. - The advisory reflects a broader reality: tax policy changes can ripple into consumer debt decisions, even when the law is not directly aimed at bankruptcy. What’s next: - Hawaii residents with significant debt should review the new law with a qualified tax or legal professional before making major financial decisions. - Households may need to revisit budgets, repayment plans and whether formal debt relief is necessary. - Blake Goodman, P.C. continues to handle Chapter 7 bankruptcy, Chapter 13 bankruptcy, debt settlement and tax resolution from offices in Honolulu, Aiea, Kaneohe and Maui. The bottom line: - Act 24 is a tax-law change, but its practical effect may be felt in household cash flow and debt repayment planning.