What are the best business debt settlement companies in Hawaii? Any that have a lawyer licensed in Hawaii and that understand how mainland funders turn judgments into liens in Hawaii.
Remember, the funder is likely on the mainland, your contract likely has a forum selection clause pointing there (most likely New York), and ACHs are taken daily from your account on mainland time. You will also likely never meet your business debt settlement provider, so it is important to ask the right questions.
Is it legal for business debt settlement companies to work in Hawaii?
It depends on the company. Under Hawaii’s debt adjuster statute, HRS 446-2, it is unlawful for any person to act or offer to act as a debt adjuster, and anyone who does is guilty of a crime punishable by a fine of up to $500, up to six months in jail, or both. A debt adjusting contract entered into for profit is void and unenforceable.
The statute defines a “debtor” as an “individual.” HRS 446-1. Thus, an advance to an LLC may be outside Hawaii’s debt adjuster statute while an advance to a person who guarantees the debt or a sole proprietor may not be (we found no Hawaii guidance on this). Raise it with your provider and an attorney licensed in Hawaii.
The statute does not apply to attorneys licensed to practice in this State, to nonprofits that charge only nominal expenses for their services, or to people acting under a court order. HRS 446-3. But the exception for attorneys only applies to those licensed in Hawaii.
Does Hawaii’s usury law apply to merchant cash advance contracts?
Rarely. The usual twelve percent cap (twenty-four percent for certain financial institutions) covers little, because Hawaii’s usury law states that “with respect to any transaction other than a consumer credit transaction, a home business loan, or a credit card agreement, it shall be lawful to stipulate by written contract for any rate of interest not otherwise prohibited by law.” HRS 478-4(c).
A “home business loan” is a credit transaction that is not consumer credit and is secured by a mortgage on the principal dwelling of a natural person, where the credit extended does not exceed $250,000. HRS 478-1. So even if a merchant cash advance were treated as a loan, a personal guarantee isn’t a “home business loan.” However, if the funder took a mortgage against the guarantor’s home for $250,000 or less, Hawaii’s usury law would apply and the funder would only get the principal, with any interest paid credited against it. HRS 478-5. Most merchant cash advance contracts are governed by New York law anyway, so see our article on New York’s criminal usury law and how it applies to MCA contracts.
What happens when a mainland judgment is brought to Hawaii?
A mainland funder files an exemplified copy of its judgment with the Clerk of the appropriate Hawaii court. A judgment filed this way has the same effect as a Hawaii judgment, including establishing a lien, and is subject to the same defenses. HRS 636C-3. The Clerk then mails notice to the address in the creditor’s affidavit. HRS 636C-4. You can get a stay pending an appeal in the original state if you post the security that state requires. HRS 636C-5.
Your provider should work to settle with the funder before the judgment is filed. For whether a funder can skip the lawsuit altogether, see our article on whether out-of-state funders can use confessions of judgment.
What can merchant cash advance funders take from guarantors in Hawaii?
Hawaii has a relatively low homestead exemption but high protections for those holding property with a spouse.
| Asset | Protection | Source |
|---|
| Home equity | $30,000 for a head of family or anyone 65 or older; $20,000 for anyone else; one parcel | HRS 651-92 |
| Home held as tenants by the entirety | Recognized for spouses and reciprocal beneficiaries; ends on divorce | HRS 509-2 |
| Vehicle | One vehicle up to $2,575 in wholesale equity | HRS 651-121 |
| Jewelry | Up to $1,000 | HRS 651-121 |
| Tools of the trade | Includes one commercial fishing boat and nets and a vehicle used in the trade | HRS 651-121 |
| Wages | Garnishment limited to 5% of the first $100 a month, 10% of the next $100, and 20% above $200 | HRS 652-1 |
If you own your home alone, you’re in trouble once equity tops $20,000 or $30,000. However, if you and a spouse who didn’t sign the guarantee hold your home as tenants by the entirety, you’re in a much better position. Tell your settlement provider that.
How do you handle a funder six hours ahead?
There is only a half a day overlap between Hawaii and New York, since Hawaii has no daylight saving time. If the funder’s collections desk closes at 5 or 6 p.m. Eastern, that’s 11 a.m. to 1 p.m. in Hawaii. In the winter, New York is 5 hours ahead of Hawaii; from March to November, it’s 6 hours. Have your provider send disputes, hardship requests, etc. in writing early in your day. See also how to legally stop ACH withdrawals from an MCA.
How should you vet a provider you’ll never meet?
Ask the debt settlement company these questions, and get the answers in writing:
- Will you retain a Hawaii licensed attorney? (Make sure they are licensed here.)
- If not, how will they comply with Hawaii law if you’re a guarantor or sole proprietor? See HRS ch. 446.
- Are you registered to do business in Hawaii? If not, who will sign your settlement?
Federal telemarketing rules won’t police their fees, since most business-to-business calls are exempt. See 16 CFR 310.6. Read more about how much business debt settlement costs.
Frequently Asked Questions
If my contract with a settlement firm is void in Hawaii, can I get my money back?
According to HRS 446-2, a debtor may recover all sums deposited with a for-profit debt adjuster that were not disbursed to creditors. The question is whether you count as a debtor when you hire a company to settle business debt. Have a Hawaii licensed attorney review your contract.
Does Hawaii have a commercial financing disclosure law?
As of a March 2026 survey of state commercial financing disclosure laws, Hawaii does not have one. Ten states do: California, Connecticut, Florida, Georgia, Kansas, Missouri, New York, Texas, Utah, and Virginia.
How long can a funder enforce a judgment against me in Hawaii?
Under HRS 657-5, judgments are presumed paid after 10 years. The creditor can ask for the judgment to be extended within 10 years for up to 20 years. However, under HRS 657-1, the creditor only has 6 years to sue you for contract debts.