Hawaii bankruptcies rose in June for the fifth time in six months and halfway through 2018 are threatening to end the state’s streak of seven straight years of declines.
Even with local economists forecasting continued growth for the state, filings in Hawaii jumped 14.5 percent last month, according to data released Monday by the U.S. Bankruptcy Court, District of Hawaii. There were 126 filings compared with 110 in the year-earlier period.
At the midpoint of this year there were 741 filings, up 14 percent from 650 during the same period in 2017.
Despite the increase in bankruptcies, state chief economist Eugene Tian said it’s not an indication that Hawaii is headed for its first recession since 2008-09.
| SEEKING RELIEF
Bankruptcy filings in June rose from a year ago.
2018 2017 PCT. CHANGE
Chapter 7 80 70 14.3%
Liquidation
Chapter 11 0 1 —
Business reorganization
Chapter 13 46 39 17.9%
Individuals with regular sources of income set up plans to pay creditors over time
Total 126 110 14.5%
Source: U.S. Bankruptcy Court, District of Hawaii
|
“During recession times, average bankruptcy filings were over 2,000 cases during the half-year period, and now (are) 741, not even half of that level,” said Tian of the state Department of Business, Economic Development and Tourism. “I believe the increase in bankruptcy is due to the uneven growth in our industries. We see the overall economy has been growing healthy, but there were a few industries that lost jobs in 2017, such as manufacturing, construction and educational services.”
Tian said bankruptcy filings are a lagging economic indicator rather than a leading indicator and occur after the economy is already in the doldrums.
“The most recent recession was in 2009, but the bankruptcy filings peaked in 2010,” he said.
In June, the number of Chapter 7 liquidation filings — the most common type of bankruptcy — increased 14.3 percent to 80 from 70.
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 17.9 percent to 46 from 39.
There were no Chapter 11 cases last month compared with one in the year-earlier period. Chapter 11 filings typically involve business reorganization.
Honolulu County filings increased to 91 from 76 and Hawaii County filings nearly doubled to 12 from 7. Maui County filings held at 20 from the year-earlier period while Kauai County filings decreased to three from seven.
Christine Donnelly had the day off. Kokua Line resumes Friday.
