The number of Hawaii residents and businesses filing for bankruptcy fell sharply in October, extending a downward trend in bankruptcies that began nearly three years ago.

There were 167 bankruptcy cases filed in October, down 27 percent from the same month a year ago, according to data released by U.S. Bankruptcy Court. Through the first 10 months of this year, bankruptcy filings were down 17 percent from the same month a year earlier. Bankruptcies have fallen every year since peaking at 3,954 cases in 2010 during the last economic downturn.

Filings fell 19 percent on Oahu to 108 cases in October from 133 a year earlier. Hawaii County experienced a 55 percent decline to 14 cases from 31 cases during the same period last year. The number of filings in Maui County fell to 35 from 55, a decline of 36 percent. Bankruptcy cases in Kauai County fell to 10 in October from 11 a year earlier.

The bulk of the filings in October — 125 cases — were filed under Chapter 7 of the federal bankruptcy code, which calls for liquidation of a debtor’s assets. There were 39 filings under Chapter 13, which allows debtors to set up a plan to repay creditors over time, and two filings were under Chapter 11, which is used mostly by businesses to reorganize. There also was one filing under Chapter 12, which applies to the reorganization of family farms.

Bankruptcy filings typically decline as economic conditions improve. That has been the case in Hawaii, where the unemployment rate has declined along with consumer debt loads over the past few years.

Hawaii consumers cut their credit card debt to an average of $5,327 in September from $6,650 in September 2012, according to the latest data available from personal finance company Credit Karma. Although Hawaii’s average credit card debt was the second highest nationally, the average credit score of 664 for Hawaii residents was the highest of all 50 states and the District of Columbia. Borrowers with higher credit scores represent a lower risk to the lender.