Hawaii bankruptcies rose for the third time in four months this year as the state’s slowing economic growth continued taking its toll on consumers.
Filings in April edged up 3.3% to 156 from 151 in the year-earlier period, according to data released Wednesday by the U.S. Bankruptcy Court, District of Hawaii. They were the most filings for any April since 162 were filed in 2014.
At the current pace, statewide filings will rise for the second year in a row after seven straight years of declines. Through four months, bankruptcy cases are up 14.3% to 559 from 489 during the same time frame in 2018.
Honolulu bankruptcy attorney Greg Dunn attributes the increase to consumers spending beyond their means.
“The economy has been good the last few years, and I think that’s brought a lot of confidence to people,” he said. “They’re doing better financially and making more money, but also spending more money and going on credit more. We’re in the longest bull market in history so I think we’re due for another change in the business cycle. In the last recession, a year before everything crashed in 2008, I saw bankruptcies picking up a lot about a year before the stock market crashed. This is going to be history repeating itself. I can see it right now.”
Dunn said his workload began increasing about the middle of last year.
“I started seeing more bankruptcy cases maybe the last six, eight months of last year,” Dunn said. “I’ve seen a pickup in bankruptcies this year. I can definitely feel it’s up because I’m working a lot more and seeing a lot more people. I’m definitely filing more cases than I did at this point last year. I definitely see a spike.”
Filings for Chapter 7 liquidation, which is the most common type of bankruptcy, fell 1.7% in April to 103 from 105.
Chapter 13 filings, which allow individuals with regular sources of income to set up plans to make installment payments to creditors over three to five years, jumped 15.2% to 53 from 46.
There were no Chapter 11 filings in either April or the same time a year ago. Chapter 11 filings typically involve business reorganization.
Bankruptcy filings rose in two of the four major counties from the year-earlier period. Honolulu County filings spiked to 131 from 112 and Kauai County filings rose to seven from five. Hawaii County filings fell to seven from 13 and Maui County filings dropped to 11 from 21.
SEEKING RELIEF
Bankruptcy filings in April rose from a year ago.
2019 / 2018 / % CHANGE
Chapter 7 103 105 -1.9%
Liquidation
Chapter 11 00 00 00%
Business reorganization
Chapter 13 53 46 15.2%
Individuals with regular sources of income set up plans to pay creditors over time
Total 156 151 3.3%
Source: U.S. Bankruptcy Court, District of Hawaii
