Bankruptcies in isles drop amid improving economy

Greg Dunn makes his livelihood as a bankruptcy attorney.

Lately, though, his workload has been dropping amid an improving state economy.

Hawaii bankruptcies fell 8.4 percent in April to continued a downward trend that has seen the number of filings flat or down for 59 of the past 61 months, according to data released Monday by the U.S. Bankruptcy Court, District of Hawaii.

There were 120 cases filed last month, down from 131 in the year-earlier period and the fewest filings in any April since 73 were filed in 2006.

The only interruption in the downward trend was in October and November of last year when bankruptcies were up slightly over the year-earlier period.

Bankruptcy filings have been following the same trend as Hawaii’s job market, where the unemployment rate was 3.1 percent in March, the lowest since 2007.

“It looks like the economy is getting better and people are in less debt,” Dunn said. “I think they’re more careful, and I think the job situation is a lot better now than it was in the past.”

Dunn said his most recent cases have included filing Chapter 13s for people wanting to save their homes from foreclosure, and other filings for people who had credit card problems they wanted to resolve.

“I did notice there has been less bankruptcies filed in the last couple of months,” Dunn said. “March was pretty good for me, but I did see a substantial drop in April. I think the job situation is pretty stable right now, and it is reflected in the fewer filings of bankruptcies.”

Chapter 7 liquidation bankruptcies — the most common type of bankruptcy — fell 5.2 percent last month to 91 from 96 in the year-earlier month. Chapter 13 filings, which allow individuals with regular sources of income to set up plans to pay creditors over time, declined 20.6 percent to 27 from 34. And there were two Chapter 11 cases, typically a business reorganization, compared with none in the year-earlier period.

Across the state the number of filings declined in three of the four major counties last month. Bankruptcies in Honolulu County decreased to 80 from 84, in Maui County fell to 20 from 30 and in Kauai County dropped to five from eight. In Hawaii County bankruptcies rose to 15 from nine.