Bankruptcies fell in September by 28.9 percent compared with last September, the largest monthly percentage drop so far this year.
The decline in filings was led by a 60.2 percent drop in Chapter 13 filings, which also was the largest monthly drop in its category so far this year.
Chapter 13 bankruptcy filings allow individuals with regular sources of income to work out payment plans with creditors and are commonly used by homeowners seeking to prevent foreclosure.
The decline in Chapter 13 cases is likely because the number of foreclosures has dropped in Hawaii after a new law was enacted in May, said bankruptcy attorney Donald Spafford.
The law reduced the number of foreclosures in the last four months while the state was setting up a new procedure for mediating foreclosure cases.
"What we could see, once lenders start doing (more) foreclosures, is that Chapter 13s might pick up again," Spafford said.
SEEKING RELIEF
Bankruptcy filings in September dropped from a year ago:
| |
2011 |
2010 |
PCT. CHANGE |
| Chapter 7 |
199 |
240 |
-17% |
| Chapter 11 |
0 |
1 |
-100% |
| Chapter 13 |
35 |
88 |
-60.2% |
| Total |
234 |
329 |
-28.9% |
» Chapter 7: Liquidation
» Chapter 11: Business reorganization
» Chapter 13: Individuals with regular sources of income set up plans to pay creditors over time.
Source: U.S. Bankruptcy Court, District of Hawaii
|
Overall, monthly bankruptcy filings have decreased nearly every month in 2011 from the year-before period. Year-to-date, the 2,613 cases filed represent a 13.6 percent decline from the first nine months of last year.
No new business reorganizations were filed in September, though one business, Diamond and Diamond Inc., which did business as Glowing Dragon Seafood Restaurant, filed a Chapter 7 liquidation case and the restaurant has closed. The restaurant’s location, 1032 Maunakea St., also had housed Chin’s Chinatown Restaurant and Wong & Wong Chinese Restaurant in previous years.
Another business bankruptcy case, that of title and escrow company Security Title Corp. filed in April, was dismissed Monday. Led by President David Palk, the bankruptcy was filed to "enable an orderly sale of the debtor’s assets and to prevent the disruption of various closings being handled by (the company) as escrow that would have resulted from its landlord’s eviction suit," according to the company’s motion to dismisss the case.
The company will continue to work with the state of Hawaii Director of Financial Institutions to resolve potential claims relating to bonds it had previously posted.
Palk and attorneys associated with the case declined to comment.
