Hawaii’s improving economy has sharply reduced the state’s number of bankruptcy filings.
The number of cases statewide fell 13.5 percent in November to all but guarantee that Hawaii will end the year with the fewest number of bankruptcies since 2007.
Hawaii had 128 filings in November — its lowest monthly total since 122 were filed in January — and had 1,590 through 11 months, according to recent data from U.S. Bankruptcy Court.
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Bankruptcy filings in November fell from a year ago:
| |
2014 |
2013 |
Pct. Change |
| Chapter 7 |
91 |
100 |
-9.0% |
| Chapter 11 |
1 |
1 |
— |
| Chapter 13 |
36 |
47 |
-23.4% |
| Total |
128 |
148 |
-13.5% |
» Chapter 7: Liquidation
» Chapter 11: Business reorganization
» Chapter 13: Individuals with regular sources of income set up plans to pay creditors over time
Source: U.S. Bankruptcy Court, District of Hawaii
|
At its current pace of about 145 a month, the state will end the year with 1,735 filings. The last time it was lower was 2007 when 1,381 cases were filed.
"Bankruptcies tend to track the economy, so it’s not surprising that it’s down when the economy is improving, which in terms of the labor market certainly has been the case," said Jack Suyderhoud, a First Hawaiian Bank adviser and professor of business economics at the University of Hawaii at Manoa Shidler College of Business. "When you look at the GDP (gross domestic product) for the U.S. as a whole, 2014 is going to end up pretty good despite the weak start at the beginning of the year. To me it’s not a surprise that bankruptcies are going down in this part of the business cycle."
Statewide filings have been flat or down for 32 months in a row.
At their recent peak in 2010, bankruptcy cases averaged 330 a month and hit 3,954 for the year as the local economy recovered from the 2008-2009 recession.
Suyderhoud said it remains to be seen how the economy continues its recovery into next year in the face of global headwinds.
"The data we’re getting on the overall economy is pretty strong," he said. "The big question is how this will carry over into 2015 given weakness in Europe and Asia and the strength of the U.S. dollar."
In November the most common type of bankruptcy — Chapter 7 liquidation — dropped 9 percent to 91 from 100.
Chapter 13 filings, which allow individuals with regular sources of income to set up plans to pay creditors over time, fell 23.4 percent to 36 from 47.
The other major type of filing, Chapter 11, had one case last month as well as in November 2013. Chapter 11 filings allow a business to reorganize.
November bankruptcies fell 28.6 percent in Honolulu County to 70 from 98. Filings rose 16.7 percent in Maui County to 28 from 24 and more than doubled in Kauai County to seven from three. Hawaii island cases remained steady at 23 filings.
