POSTED: 01:30 a.m. HST, Mar 02, 2011
Bankruptcy filings in Hawaii dipped last month, led by a nearly 4 percent drop in Chapter 7 bankruptcy liquidation cases.
The 288 total filings were down 1 percent from 291 a year ago.
Chapter 13 filings, which homeowners can use to prevent a foreclosure, increased nearly 14 percent to 58. Chapter 13 is for personal bankruptcies in which a wage earner can work out a repayment plan with lenders over three to five years.
SEEKING RELIEFBankruptcy filings in February decreased 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
"People come to see me, very often, because they're going to be foreclosed upon," said Lisa Volquardsen, a Kona-based bankruptcy attorney.
"Banks don't want to" modify loans because "it is costly and takes a lot of resources. ... The banks created the situation, and they should do something to get people out of this mess," said Volquardsen.
The federal government's efforts to reduce foreclosures "hasn't worked out ... and this comes from a person who supports (President Barack) Obama," said Ry Barbin, an attorney specializing in bankruptcies and financial workouts. "As long as we've got these foreclosures, I really don't see the economy coming back."
No businesses filed for Chapter 11 reorganization last month, but two neighbor island businesses, Big Island-based Typhoon Security Technology Inc. and Maui-based A Tropical Enhancement Landscape LLC, filed for Chapter 7.