Statewide bankruptcies fell for the fourth time in five months and sank to the lowest total for any May in 15 years thanks to an improving economy that saw more people return to work.

The 100 cases in May were down 10.7% from 112 in the year-ago period, according to new data released by the U.S. Bankruptcy Court, District of Hawaii. It was the fewest number of cases for any May since there were 93 in 2006.

Through the first five months of 2021, bankruptcies are down 11.2% to 554 from 624 in the year-ago period as they stay on pace to decline for the second year in a row.

The 19.3% spike in April appears to have been an anomaly, according to Eugene Tian, chief economist for the state Department of Business, Economic Development and Tourism.

“It happened without a cause,” Tian said via email. “In May this year, tourism recovery accelerated. Visitor arrivals in May 2021 was about 74% of the May 2019 level, while April 2021 visitor arrivals recovery was about 57% of the April 2019 level. The improvement in May was significant. If looking at the U.S. visitors alone, we saw more U.S. visitors in May 2021 than in May 2019.”

The economy’s improvement also can be seen in the state’s declining unemployment rate, which plunged six-tenths of a percentage point to 8.5% in April as the state added 10,000 nonfarm payroll jobs.

But as domestic tourism recovers, international visitors coming to Hawaii are less than 1% of what they were two years ago.

”Those businesses and individuals that rely on international visitors may continue to wait,” Tian said. “The recovery of international tourism will be very slow until the end of the year.”

Tian said the state’s extension on the eviction moratorium will give renters and homeowners another 60 days before deciding whether they want to avoid eviction by filing bankruptcy.

“But I think the cases would not be many,” he said. “With the opening of our economy, lifting travel restrictions, and ARPA (American Rescue Plan Act) money from the federal government, I believe the bankruptcy filings will remain low during the rest of the year.”

Honolulu bankruptcy attorney Greg Dunn said he’s unsure what will happen during the remainder of 2021, but he “will take it as it comes.”

He said in his own practice that bankruptcies in April rose 54% from the year-ago period but that he noticed a sharp decline in May.

“With the government assistance programs, people have been able to stay afloat like the 60-day extension of the home eviction moratorium,” Dunn said via email. “I have also noticed that unemployment benefits have also been extended for many, and the benefits are higher with the additional federal assistance, which may discourage people from wanting to go back to work if they have to take on a job that pays less then unemployment benefits. Jobs are beginning to open up and more people are going back to work, but there’s also been an accumulation of more debt since the pandemic which people will have to deal with soon.”

In May, Chapter 7 liquidation filings — the most common type of bankruptcy — decreased 13.6% to 76 from 88 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, rose 9.1% to 24 from 22.

There were no Chapter 11 filings last month, compared with two in the year- earlier period. Chapter 11 filings are primarily for business reorganization.

Around the state, bankruptcies were mixed in the four major counties last month. Honolulu County filings fell to 69 from 92, and Kauai County filings slipped to four from six. Hawaii County filings rose to six from four, and Maui County filings increased to 21 from 10.

SEEKING RELIEF

Bankruptcy filings in May fell from a year ago.

2021 2020 PCT. CHANGE

Chapter 7 76 88 -13.6%

Liquidation

Chapter 11 0 2 —

Business reorganization

Chapter 13 24 22 9.1%

Individuals with regular sources of income set up plans to pay creditors over time

Total 100 112 -10.7%

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