Hawaii bankruptcies in August matched the year-earlier total but remained on pace to finish 2019 at their highest level in five years.
There were 141 bankruptcies last month to push the year-to-date total to 1,110, according to data released Tuesday from the U.S. Bankruptcy Court District of Hawaii. At the current pace of an average 139 a month, there would be 1,668 filings for the year. That would top the 2015 total of 1,569 and be the most since there were 1,702 in 2014.
So far this year, bankruptcies are up 12.7% from the 985 filed at this time in 2018.
“It’s booming right now,” Honolulu bankruptcy attorney Greg Dunn said. “It’s really beginning to pick up. I think there’s something coming on. We’re probably seeing the beginning stages of another recession coming.”
Dunn said it’s unlikely there would be a recession until after next year’s presidential election.
“I don’t think it’s going to happen until after the election because I think (President Donald) Trump is going to do everything he can to avoid a recession,” he said. “He’s probably going to put a lot of pressure on the Federal Reserve to avoid a recession, but I think it’s unavoidable. I don’t think it matters who gets into office. I think it’s going to happen. This is the longest bull market we’ve been in.”
Dunn said the clients he sees are often seeking bankruptcy for the same reason.
“More people are going on credit,” he said. “They’re spending money, but they’re also going on credit, too. The cost of living is going up, and that’s contributing, and even though people are making more money, the cost of living and other costs are going up.”
Bankruptcy filings had fallen seven years in a row before breaking that streak in 2018.
Filings for Chapter 7 liquidation, the most common type of bankruptcy, dipped 3.4% last month to 84 from 87 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, ticked up to 55 from 54 in the year-earlier period.
There were two Chapter 11 filings last month compared with none a year ago. One was by Honolulu-based IBIS Networks Inc., an energy management and data analytics company, and the other was by Koloa, Kauai-based Pacific Rim Property Service Corp. Chapter 11 filings are primarily for business reorganizations.
Bankruptcies increased in three of the four major counties. Honolulu County filings edged up to 110 from 109, Maui County filings rose to 17 from 16 and Kauai County bankruptcies ticked up to four from three. Hawaii County filings fell to 10 from 13.
SEEKING RELIEF
Bankruptcy filings in August were the same as a year ago.
2019 / 2018 / PCT. CHANGE
Chapter 7 84 87 -3.4%
Liquidation
Chapter 11 2 0 —%
Business reorganization
Chapter 13 55 54 1.9%
Individuals with regular sources of income set up plans to pay creditors over time
Total 141 141 00%
Source: U.S. Bankruptcy Court, District of Hawaii
