The number of bankruptcy cases filed in Hawaii fell in October for the seventh consecutive month, putting the state on track for the first annual decline in filings since 2006.

There were 260 bankruptcy cases filed last month, down 13 percent from October 2010, according to data compiled by U.S. Bankruptcy Court. Through the first 10 months of the year, there were 2,873 bankruptcy cases, a 13.4 percent decline from the same period last year.

The slow but steady drop in new cases is more evidence that incremental improvements in the economy are making it easier for individuals and businesses to handle their debt loads, said David Farmer, one of four federal bankruptcy court trustees operating in the District of Hawaii.

"Our big drivers are tourism and military spending, and we’re seeing continued good news from them this quarter. That translates to money in our system, and jobs," Farmer said.

He called the visitor industry the "wild card" for 2012. If the visitor industry is able to hold its ground, then bankruptcy filings should continue to decline, he said.

Throughout the state, the biggest drop in October occurred in Hawaii County where bankruptcy cases fell to 36, a 34 percent decline from 55 filings a year earlier. Filings in Honolulu County fell to 138, a 22 percent decline from 177 cases filed in October 2010. Filings rose 38 percent in Maui County to 73 from 53, while in Kauai County the number of cases rose 8 percent to 13 from 12.

Bankruptcies in Hawaii began climbing in 2007, coinciding with the start of the economic downturn that caused many businesses to fail and pushed the unemployment rate to a 30-year high. Bankruptcies peaked last year with 3,954 cases filed.

Although the U.S. economy officially emerged from recession in the summer of 2009, bankruptcy cases continued to mount as individuals and businesses struggled to dig themselves out of debt piled up during the downturn.

Reports by several of the nation’s credit reporting agencies showed that Hawaii consumers paid down their credit card debt at a faster rate in the second quarter after trailing the rest of the nation for much of the previous two years.

TransUnion said average credit card debt in Hawaii fell 12.9 percent in the second quarter over the previous year, while delinquent payments sharply declined.

The average credit card debt in Hawaii totaled $4,871, down from $5,594 in the year-earlier quarter and slightly above the national average of $4,699, TransUnion said.