For most of the past six years, the number of bankruptcies filed in Hawaii has been on the decline.

Now that trend appears to have reversed.

For the third month in a row, statewide filings increased from the year-earlier period as the number of cases in February rose 13 percent, according to data released Wednesday by the U.S. Bankruptcy Court, District of Hawaii. There were 122 filings last month compared with 108 in the year-earlier period.

The last time there were at least three months of increases in a row was in 2006-2010, when filings increased for 49 consecutive months after a bankruptcy law change in October 2005 made it more difficult and costly to file.

“I think we’re going to see a permanent, but not hyper-accelerated, trend of increased filings,” said Honolulu bankruptcy attorney Jean Christensen.

Christensen said the increase in filings during 2006-2010 stemmed from the aftermath of a change in the bankruptcy law and the effects of the 2008-2009 recession.

“We had a number of filings going back to the housing collapse in 2008,” she said. “A lot of those were out of absolute necessity. We had a higher number of Chapter 13 filings due to foreclosures and houses being underwater. Then you had a general word of mouth about the positive effects of bankruptcy (for people at that time who were looking to get out of debt).”

Christensen said this latest increase in filings may be linked to the improvement in Hawaii’s economy.

“Part of it goes against logic,” she said. “Having some economic growth means you have people with a bit more consumer confidence. They’re engaging in the economy a little bit more and taking out credit for various reasons. Sometimes, the effect takes longer to see over time. If you have economic improvement in Hawaii and nationwide, you’ll see more borrowing. And some of those people will stumble and need bankruptcy relief eventually.”

Despite the recent upward trend, statewide filings have been flat or down from the year-earlier period for 65 of the past 71 months.

In February, Chapter 7 liquidation — the most common type of bankruptcy — jumped 37.7 percent to 84 from 61 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, fell 15.9 percent to 37 from 44.

There was one Chapter 11 case last month, compared with three in the same month a year ago. Chapter 11 bankruptcies typically involve business reorganization.

Across the state, the number of filings rose in three of the four major counties. Bankruptcies in Honolulu County increased to 85 from 82, Maui County filings rose to 22 from 14, and Kauai County bankruptcies increased to seven from none in the previous February. Hawaii County filings bucked the trend as its bankruptcy filings declined to eight from 12.

SEEKING RELIEF

Bankruptcy filings in February rose from a year ago.

Source: U.S. Bankruptcy Court, District of Hawaii