Hawaii bankruptcies plunged last year to their lowest level since before the recession as the state’s recovery continued spreading to all areas of the economy.

Historically low interest rates, a six-year low in state unemployment, record home prices on Oahu, a third straight year of record visitor arrivals, a strong construction outlook and a stock market at all-time highs have provided the underpinnings for the state’s slow but steady growth.

Hawaii bankruptcy filings fell for the fourth straight year and ended 2014 with 1,702 cases to mark their lowest level since 1,381 were filed in 2007 just ahead of the 2008-2009 Great Recession, according to data released Friday by U.S. Bankruptcy Court, District of Hawaii. Last year’s total was down 17.8 percent from 2,071 in 2013.

"The economy is getting better for a lot of folks," Hono­lulu bankruptcy attorney Ed Magauran said. "People’s real property values are going up, their stock market accounts are going up. We tend to see that more in people who already had money, but there’s still a spillover effect to Main Street — for people who didn’t have as much wealth before — as opposed to Wall Street."

Hawaii bankruptcy filings surged to 3,954 in 2010 — the year after the recession ended — before beginning a gradual descent. Filings fell to 3,325 in 2011, 2,528 in 2012 and then 2,071 in 2013 before falling yet again in 2014.

Low interest rates, which have made it easier to borrow money and purchase or refinance homes, have been a large contributor to the decline in bankruptcies.

Magauran expects the low number of bankruptcy filings to continue in the short term.

"We are encouraging more and more debt in that the price of borrowing is as low as it has ever been," he said. "That means there’s a lot of easy money around. That also means there’s a lot of debt around. I don’t expect there to be a change in the pattern of the number of bankruptcy filings until interest rates rise."

Honolulu bankruptcy attorney Greg Dunn said he filed about 210 bankruptcy cases in 2014, which was about 25 percent fewer than he filed the year before.

"It may be things are getting better," Dunn said. "There may be some improvement. I think there’s less debt out there. Maybe people can handle their debts better now, so I would probably say things are getting better."

In 2014 the most common type of bankruptcy — Chapter 7 liquidation — fell 22.1 percent to 1,196 from 1,535.

Chapter 13 filings, which allow individuals with regular sources of income to set up plans to pay creditors over time, declined 3.7 percent to 496 from 515.

And for the other major type of filing, Chapter 11, there were 10 filings compared with 20 in 2013. Chapter 11 filings allow a business to reorganize.

In December, total bankruptcies fell 13.8 percent to 112 from 130.

Bankruptcies fell for all the state’s four counties in 2014. Filings in Hono­lulu County fell 16.2 percent to 1,074 from 1,281, Maui County filings dropped 27.7 percent to 321 from 444, Kauai County filings fell 30.4 percent to 78 from 112 and Hawaii County filings dropped 2.1 percent to 229 from 234.

"Low interest rates have helped the economy, at least relative to what would have happened if we didn’t have low interest rates," said Leroy Laney, a professor of economics and finance at Hawaii Pacific University. "The recovery since the Great Recession has been slow, but here in Hawaii it’s been fairly steady. It was helped first by tourism, and then construction finally kicked in, and we’ve had a falling low unemployment rate."

Laney said, though, that low interest rates shouldn’t get all the credit for the recovery because rates are low nationwide and other states haven’t showed as much improvement as Hawaii.

"I don’t know how much to lay at the doorstep of low interest rates," Laney said. "They certainly have helped overall, and the Fed is quite aware of that in their policy. Eventually interest rates will go up."

Magauran, the bankruptcy attorney, said there’s no question that some people in Hawaii are having a hard time despite the improving economy.

"There are lots and lots of people struggling," he said. "There are still lots of liens being filed against people by credit card companies and still vehicles being repossessed. There’s still a lot of people hurting. Let’s face it: To live in Hawaii, you’ve got to work, your wife’s got to work and maybe you’ve got to get a second job.

"I think of bankruptcy as a lagging indicator," Magauran said. "It’s not that people don’t have a lot of debt; they’re juggling trying to make it work, and they seem to be doing so in this low-rate world. I don’t know how long this will continue. Nobody does."