POSTED: 01:30 a.m. HST, Jul 02, 2010
LAST UPDATED: 02:39 a.m. HST, Jul 02, 2010
The number of Hawaii bankruptcy filings remained stubbornly high in June, eclipsing the 300 mark for the fourth month in a row.
Filings jumped to 371 last month, a 36.9 percent increase over the same month a year ago, according to federal Bankruptcy Court statistics. It was the second-highest number of cases filed since October 2005, when changes to federal law made it more difficult to seek bankruptcy protection.
Michael Glenn, who has been a bankruptcy attorney for 15 years, said he doesn't see filings slowing any time soon.
"I wouldn't expect bankruptcies in the state of Hawaii to start decreasing until at least the middle of next year," Glenn said.
"The economy still isn't operating at full speed. The slight increases in visitor spending and visitor arrival numbers don't mean much to most people in Hawaii."
SEEKING RELIEFBankruptcy filings in June rose from a year ago:
» Chapter 11: Business reorganization
» Chapter 13: Individuals with regular sources of income set up plans to pay creditors over time.
Source: U.S. Bankruptcy Court, District of Hawaii
He said he has noticed more people are coming through his doors who are filing because their businesses have failed.
"Some of them are $80,000 to $100,000 in debt. Not only has their business failed, but they no longer have a job to pay their debt. It's a mathematical decision."
Glenn also said some of his clients are being spurred to file as a result of recent federal legislation requiring credit card companies to disclose more information to customers about how long it will take to repay their debt under difference scenarios.
"For someone with $15,000 in debt at 18 percent, it would take them 57 years to pay off their card at the minimum monthly payment and cost them a total of more than $58,000," he said.
"When you put that kind of information in front of people, they start thinking they'll never get ahead and that it would be easier to file for bankruptcy."
The bulk of the June cases -- 307 -- were filed under Chapter 7 of the bankruptcy code, which calls for the liquidation of assets.
Honolulu led all jurisdictions with 207 cases. There were 70 cases filed in Maui County, 67 in Hawaii County and 27 in Kauai County.