Statewide bankruptcies rose just 16.3 percent in September as the pace of filings slowed to the lowest level this year, according to data released yesterday from U.S. Bankruptcy Court, District of Hawaii. The 329 cases filed last month matched the previous month and tied for the third-lowest total this year. There were 283 cases filed in September 2009.

U.S. Bankruptcy Court trustee David Farmer said the length of time he spends in creditors’ meetings is getting shorter, and that can mean only one thing.

"I think we’ve turned the corner," Farmer said yesterday.

"You can feel the bankruptcy numbers are down because those creditors’ meeting days are shorter," the Honolulu-based Farmer said. "You also get a sense they’re coming down because our tourist numbers are coming back. Tourist numbers translate into money into our economy, into jobs and people being better off."

The Hawaii Tourism Authority brought more good news on Thursday when it said that visitor arrivals in August rose 11.8 percent from the year-earlier period, keeping alive a streak of the tourist numbers increasing every month this year. Arrivals and spending rose in August from every major market on all islands.

Chapter 7 liquidation bankruptcies, the most common type of filing, edged up 9.6 percent last month to 240 from 219 a year earlier.

Chapter 13 filings, which allow individuals with regular sources of income to set up plans to pay creditors over time, increased 39.7 percent to 88 from 63 a year ago.

There was only one Chapter 11 filing in September, the same number as a year ago. Those types of filings are used for business reorganizations.

Farmer said an increase in Chapter 13 filings is also an indication that the economy is getting better as more people choose repayment plans rather than liquidation. The 88 Chapter 13 filings in September were the most since 86 were filed in October 2005 and according to the Bankruptcy Court was the most ever in any month.

"We’ve wrung out the water that was left in submerged properties because most have either been foreclosed or abandoned, and the Chapter 13 numbers are up, which is generally there to save homes," Farmer said.

Honolulu bankruptcy attorney Greg Dunn said he’s always pretty busy but has noticed in the last couple of months that the number of filings is beginning to stabilize.

"I don’t know if that means the economy is getting better or people don’t have the money to do a bankruptcy," Dunn said.

Dunn said individuals he meets with have roughly $35,000 to $50,000 in credit card debt, one or two car loans if there’s a husband and wife, and possibly some other unsecured debt. He said fees are charged on a case-by-case basis, and, depending how much debt is involved, the cost for filing for bankruptcy might range from $1,300 to $2,000. In more complicated cases the fees could be about $4,000, he said.

Even though Dunn said he was busier last year at this time, he still sees 10 or more people a day, seven days a week.

"I’ve been doing this seven days a week for the last 15 years, and I’ve been doing (bankruptcies) since 1988," he said. "We do a lot of bankruptcies over here, even during good times, because our economy runs on the credit system."