The number of people filing for bankruptcy in Hawaii fell in January for the 11th month in a row, according to data published Wednesday by U.S. Bankruptcy Court.
There were 212 bankruptcy cases filed in January, down 13.5 percent from the 305 cases filed the same month a year ago. The number of new filings has declined on a year-over-year basis in every month since March 2010, when filings rose by a statistically insignificant 0.3 percent.
The steady decline in bankruptcy cases in 2011 produced the first full-year drop in filings since 2006. Bankruptcy cases also are trending lower nationally as consumers continue to rein in their spending and reduce debt loads built up during the recent recession, according to the American Bankruptcy Institute.
The number of Hawaii bankruptcy filings in the latest economic cycle topped out at an average of 330 a month in 2010. While the number of cases in January represented a significant improvement, filings are still running ahead of the pre-recession average of 115 cases a month in 2007.
Elizabeth Kane, one of four Bankruptcy Court trustees in Hawaii, said business in her office remains brisk despite what the statistics indicate.
"I was surprised to see filings were down. We’re still seeing a lot of tragic cases," she said.
"There are spouses who are breaking up and are estranged from each other — people whose unemployment has run out. Filing for bankruptcy is just one of the ways to deal with it."
Kane said she oversaw one recent case in which a person with terminal cancer filed for bankruptcy to avoid leaving other family members with debt.
Although some creditors regard filing for bankruptcy as "something immoral," it is the best option for many debtors, Kane said.
"Having worked in the system for a long time, I tend to view bankruptcy for debtors as a positive first step toward rebuilding their lives," Kane said. "It’s a fresh start and a time to turn things around."
The improvement in the bankruptcy picture around the state was mixed in January.
The biggest decline was on Hawaii island where the number of cases fell to 24 in January from 39 a year earlier, a decline of 38.5 percent.
Filings fell to 12 from 16 on Kauai (down 25 percent), to 37 from 49 in Maui County (down 24.5 percent) and to 139 from 141 in Honolulu County (down 1.4 percent).
