Hawaii bankruptcy filings rose in August for the first time in three months, a sign that the state’s economic growth might be slowing.
The higher number of filings comes on the heels of a state economic report last month in which the Department of Business, Economic Development and Tourism cut its growth forecast for Hawaii this year by a half-percentage point and projected the economy will continue to grow at a slower pace for the rest of 2017 and the three subsequent years.
Statewide bankruptcy cases rose 12.2 percent to 138 from 123 in the year-earlier period, according to data released Friday by the U.S. Bankruptcy Court, District of Hawaii. It was the most cases in August since 168 were filed four years ago. It was also the most cases for any month since 144 were filed in July 2015.
SEEKING RELIEFBankruptcy filings in August rose from a year ago.
CHANGE | 2017 | 2016 | PCT.
Chapter 7: Liquidation | 90 | 74 | +21.6%
Chapter 11: Business reorganization | 1 | 0 | —
Chapter 13: Individuals with regular sources of income set up plans to pay creditors over time | 47 | 49 | -4.1%
Total: 138 | 123 | +12.2%
Source: U.S. Bankruptcy Court, District of Hawaii
“This is just one month so you can’t see the trend yet, but the data is consistent with the economic data,” said Eugene Tian, chief economist for DBEDT. “Some industries are doing well; some industries are not doing so well. That can be seen in the increase in unemployment claims. Bankruptcy filings lag what’s happening in the economy by a few months. It’s still up and down so it’s not a continuous trend.”
Bankruptcy cases have been flat or down from the year-earlier period for 69 of the past 77 months. On an annual basis, bankruptcies have declined for six straight years since 2010 amid a solid state economy that has been bolstered by record tourist arrivals, low unemployment, a booming construction industry and record-high housing prices.
Through the first eight months of this year, there have been 899 cases compared with 933 during the same period in 2016. At that pace there will be 1,349 bankruptcy cases this year — the fewest since 955 were filed in 2006. The peak number of cases since 2006 was 3,954 in 2010.
In last month’s filings, Chapter 7 liquidation — the most common type of bankruptcy — rose 21.6 percent, to 90 from 74 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, declined 4.1 percent, to 47 from 49.
There was one Chapter 11 reorganization filing last month compared with none in the year-earlier period. Chapter 11 filings typically involve businesses.
Across the state, the number of cases rose from the year-earlier period in three of the four major counties. Honolulu County filings increased to 93 from 84, Hawaii County filings rose to 19 from 14 and Kauai County filings doubled to six from three. Bankruptcies in Maui County dipped to 20 from 22.