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Hawaii bankruptcies rose in August for the sixth time in eight months this year even as the state economy continues to remain strong.
The 141 cases last month were three more than the year-earlier period, according to recent data released by the U.S. Bankruptcy Court, District of Hawaii. The bankruptcy filings were the second most in any month this year and the highest number for any August since there were 168 filings in 2013.
Bankruptcy filings continue to stay on pace to finish ahead of 2017’s total and end the state’s streak of seven straight years of declines. Through eight months there have been 985 filings, 9.6 percent higher than 899 during the same period a year ago.
Honolulu bankruptcy attorney Greg Dunn said he’s been busier than in past years.
“It seems like with the economy improving, I see people are spending more money,” he said. “They’re going on credit more and I think they’re getting themselves into trouble because they’re overextending themselves.”
Dunn said it wouldn’t surprise him if another recession is lurking a couple years down the road.
“Just before the market crashed the last time in 2008 when the market looked pretty good at that particular point in time, bankruptcies were rising,” he said. “We’re beginning to file a lot now, and I’m not saying we’re going to get a market crash soon, but who knows? I’m thinking maybe a couple years from now because I think we’re due for another recession the way business cycles go.”
In August there were 87 Chapter 7 liquidation filings, which was three less than a year ago. Chapter 7 is the most common type of bankruptcy.
Chapter 13 filings, which allow individuals with regular sources of income to set up plans to make installment payments to creditors over three to five years, rose 14.9 percent to 54 from 47.
There were no Chapter 11 cases last month compared with one in the year-earlier period. Chapter 11 filings typically involve business reorganization.
Bankruptcy filings fell in three of Hawaii’s four counties. Hawaii County filings declined to 13 from 19, Maui County filings decreased to 16 from 20 and Kauai County filings fell in half to three from six. Honolulu County filings, however, rose to 109 from 93.
SEEKING RELIEF
Bankruptcy filings in August rose from a year ago.
2018 / 2017 / PCT. CHANGE
Chapter 7 87 90 -3.3%
Liquidation
Chapter 11 0 1 —
Business reorganization
Chapter 13 54 47 14.9%
Individuals with regular sources of income set up plans to pay creditors over time
Total 141 138 2.2%
Source: U.S. Bankruptcy Court, District of Hawaii
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