Hawaii bankruptcy filings fell in April, continuing 2 years of monthly dips

The number bankruptcy cases filed in Hawaii fell in April for the 25th consecutive month, mirroring a national trend in which businesses and households continued to dig out from debt racked up during the 2008-09 recession.

The 206 cases filed statewide last month represented a 19 percent decrease from the 264 cases filed the same month a year earlier, according to data released Wednesday by U.S. Bankruptcy Court. Bankruptcy filings in Hawaii soared during the 2008-09 recession, topping out at an average of 330 cases a month in 2010. Filings have been trending lower since then.

Bankruptcies fell in all counties except Maui, where the 55 cases filed in April was 45 percent higher than the 38 cases filed a year earlier. In Honolulu County the number of cases fell to 121 in April, a 23 percent drop from 157 the same month last year. In Hawaii County filings fell 56 percent to 20 cases and in Kauai County they fell 29 percent to 10 cases.

By category the biggest drop was in Chapter 7 liquidation filings, which fell to 157 cases in April, a 22 percent decline from the same month a year earlier. Chapter 13 cases, which allow debtors to keep their assets if they set up a plan to pay creditors over time, fell by 12 percent to 46 cases in April.

There were three Chapter 11 business reorganization cases in April, one of which was filed by Hawaii Nui Brewing LLC, a Hilo-based company that produces Mehana and Hawaii Nui beer brands.

Nationally, bankruptcy filings are on track to decline in 2013 for the third year in a row, the American Bankruptcy Institute reported recently.

"Bankruptcy filings continue to fall due to persistent low interest rates, reduced consumer spending and sustained deleveraging by businesses and households," Samuel Gerdano, executive director of the ABI, said in a news release.

Hawaii residents cut their credit card debt 11 percent in March from the same month a year earlier, according to the most recent data available from Credit Karma, a credit-scoring website.

Although Hawaii’s average credit card debt of $6,527 was the second-highest nationally, the average credit score of 671 was the best among the 50 states. A high credit score indicates a consumer’s ability to make payments on time and manage debt loads.