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Hawaii’s growing economy is showing signs of slowing.
There were more bankruptcy filings in October than in any month since 2014 as the number of cases now appears nearly certain to top 2018’s full-year total in just 11 months.
The 161 filings statewide in October soared 19.3% from 135 in the year-earlier period, according to data released Friday from the U.S. Bankruptcy Court, District of Hawaii. The last time there were this many bankruptcy filings was in April 2014 when there were 162. Last month’s filings also were up 15% from the 140 filed in September.
Through 10 months the 1,411 filings are up 11.7% over the 1,263 filed at the same time a year ago. With the number of filings averaging 141 a month, the number of cases easily should surpass last year’s full-year total of 1,490 by the end of November. This will be the second straight year that Hawaii bankruptcies have risen after falling for seven years in a row.
“It’s a very huge increase for one month,” said Eugene Tian, chief economist for the state Department of Business, Economic Development and Tourism. “I don’t think it is a trend. I don’t think there’s any economic reason. (But) the bankruptcy filing is an important economic indicator. We will watch this data more closely.”
Tian said two consecutive years of rising bankruptcies is consistent with the economy slowing down. It is not, however, necessarily indicative of a coming recession, he said.
“At the last recession the number of Hawaii’s bankruptcy filings was at nearly 4,000 cases, and now it is less than half of that level,” he said. “Through October, initial unemployment claims decreased by 4.8% in 2019 from the same period in 2018. Our unemployment rate has been stable at 2.8% and was the fifth lowest in the nation as of the end of September.”
In last month’s filings, Chapter 7 liquidation — the most common type of bankruptcy — jumped 28.9% to 116 from 90 in the year-earlier period.
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, dipped 2.2% to 44 from 45.
The only Chapter 11 filing was made by Kaumana Drive Partners LLC, which does business as Legacy Hilo Rehabilitation and Nursing Center in Hilo. There were no Chapter 11 filings in October 2018. Chapter 11 filings are primarily for business reorganizations.
Bankruptcies rose in three of the four major counties. Honolulu County filings increased to 116 from 96, Maui County filings rose to 27 from 22 and Kauai County bankruptcies edged up to six from four. Hawaii County filings slipped to 12 from 13.
SEEKING RELIEF
Bankruptcy filings in October rose from a year ago.
2019 / 2018 / PCT. CHANGE
Chapter 7 116 90 28.9%
Liquidation
Chapter 11 1 0 —
Business reorganization
Chapter 13 44 45 -2.2%
Individuals with regular sources of income set up plans to pay creditors over time
Total 161 135 19.3%
Source: U.S. Bankruptcy Court, District of Hawaii
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