Hawaii bankruptcies continue on pace for the fewest filings in nine years.
The number of cases in October dropped 7 percent from a year ago, according to data released Tuesday by the U.S. Bankruptcy Court, District of Hawaii. The 126 cases last month were down from 136 in the year-earlier period and marked the fewest filings for any October since 121 were filed in 2007.
Statewide filings have been flat or down from the year-earlier period for 64 of the past 67 months. A resilient tourism industry, strong housing market and robust construction activity have bolstered the economy.
“I think the economy is pretty much the same as last year,” Honolulu bankruptcy attorney Greg Dunn said. “Our economy goes in cycles, so it’s been a while now since the last crash. This has been a long bull market; it hasn’t been a great bull market, but it’s been a long one.”
Dunn said his filings this year are up over 2015, but that might not indicate the economy is slowing.
“I get a lot of referrals and do a lot of second and third bankruptcies for the same client because I’ve been doing this for nearly 30 years,” he said. “I’m also doing their kids’ bankruptcies and their grandchildren’s bankruptcies.”
Dunn said to file a Chapter 7 liquidation now requires a wait of eight years after a previous filing but that if a person can’t wait that long, a Chapter 13 case can be filed about four years after a Chapter 7. A Chapter 13 filing allows an individual with regular income to set up a plan to make installment payments to creditors over three to five years.
The cost of a Chapter 7 filing can range from $1,600 to $2,500, including the court filing fee of $335, according to Dunn. He said the cost could be higher in unusual cases.
For a Chapter 13 filing, the cost is based on a court schedule with the basic case priced about $3,600 in addition to a $310 court filing fee, Dunn said. A Chapter 13 could cost an additional $700 if the debtor is trying to save a house from foreclosure, he said. Other fees for amendments or motions might arise after the case is filed.
For the first 10 months of this year, bankruptcies were down 12 percent from the year-earlier period. At that pace the state will finish the year with 1,405 bankruptcies. That would be the lowest total since 1,381 were filed in 2007.
Among the different chapters of bankruptcies, Chapter 7 filings dropped 14 percent last month to 76 from 88, and Chapter 13 filings rose 11 percent to 50 from 45.
There were no Chapter 11 cases 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 decreased last month in three of the four major counties. Bankruptcies in Honolulu County fell to 84 from 91, declined in Maui County to 19 from 23 and dipped in Kauai County to six from seven. In Hawaii County, filings ticked up to 17 from 15.
