Homeowners trying to hold on to their property in tough times may have been the cause of a 49 percent jump in bankruptcies in Hawaii last month.

There were 327 bankruptcy cases filed in November, up from 219 cases a year earlier. The total filed last month was in line with the average of 332 cases filed each month this year, which has made 2010 the worst year for bankruptcies since 2005.

Some bankruptcy attorneys believe the spike in filings this year mirrors the foreclosure rate.

Chapter 13 bankruptcy, which allow an individual to reorganize their debt and create a payment plan, can be used by homeowners to save their homes. The number of Chapter 13 bankruptcy cases filed last month was 82, more than double a year earlier.

"Chapter 13 allows homeowners up to five years to catch up on mortgage payment arrearage," said attorney Donald Spafford. "What I find is a lot (of people) get turned down for loan modification, and Chapter 13 is their only option if they want to save their home."

Only about one in 15 loan modification applications is accepted, according to bankruptcy attorney Blake Goodman.

Attorney Gregg Dunn’s Chapter 13 clients exhibit strong desire to save their homes.

"There’s been an increase in foreclosures," and there are "a lot of people wanting to save their homes from foreclosure," Dunn said.

In the first 11 months of this year, there have been 3,649 bankruptcy cases filed in Hawaii, including 765 Chapter 13 cases.

Goodman said there may be another reason for the jump in Chapter 13 cases.

The U.S. Bankruptcy Court approved a "large increase" in the amount of fees an attorney can charge in Chapter 13 cases to an average of $4,000, Goodman said. The increase could "incentivize" some attorneys to steer people toward Chapter 13 filings, he said. Rates for Chapter 7 cases are market-driven and average $1,500.

Chapter 13 cases cost more because "there is a lot more work involved," Dunn said.

Chapter 7 cases, in which debts are liquidated, do not include debt reorganization plans, "so the (mortgage) lender can get permission from the court to foreclose," Spafford said.

Filing for bankruptcy "still has some embarrassment," but nowhere near the stigma it carried 50 years ago, Spafford said. Filing does have a negative impact on a person’s credit rating, "but that’s not something you can’t recover from," he said.

The attorneys don’t anticipate a slowing of bankruptcy filings until foreclosures start to drop off.

The November bankruptcy numbers are not even close to the worst the state has ever seen.

"Everybody forgot how rough the late ’90s were on Hawaii," Goodman said. The worst year in the past two decades was 1998, when 5,829 cases were filed.

Bankruptcy filings are seen as a lagging economic indicator, but even though the November-to-November number is higher, "people are making a living now," unlike the last couple of years, Goodman said. The "real estate, auto and small-business (sectors) are coming back, tourism is on the rise — the headlines continue to show good news," he noted.