From Jan. 1 through yesterday, a total of 965 local residents and businesses filed for bankruptcy protection, up from the previous first quarter high of 595, according to figures compiled by U.S. Bankruptcy Court.

The latest tally comes after statewide bankruptcies rose 52 percent in 1996 to hit an all-time annual high of 3,077.

Attorney Lorrin Kau, whose firm Doi & Kau specializes in consumer and bankruptcy issues, said many people facing bankruptcy either have lost their jobs, had their work hours cut or are facing huge medical bills.

"That causes them to get behind on payment, and once they get behind, it snowballs," Kau said. "It gets worse and worse."

Most of the cases during the first quarter, which ends Monday, were personal bankruptcies. A total of 841 Chapter 7 personal bankruptcies were filed so far this year, up from 530 in the first quarter of 1996.

Chapter 13 bankruptcies - a form of personal bankruptcy for wage-earners who pay off their debts over time - more than doubled to 110 from first quarter 1996's 52. Business bankruptcies in the form of Chapter 11 reorganizations increased slightly, to 14 from first quarter 1996's 13.

"They're throwing in the towel and walking away from the business," Guben said. "There's no hope for reorganization."

The bankruptcy statistics for this quarter contrast with foreclosures, which remained relatively even with last year's first quarter. According to the state Judiciary, 645 foreclosure suits were filed so far this year, compared with 644 in the year-earlier quarter.

For all of 1996, a record 2,753 foreclosure suits were filed in Hawaii, a 40 percent increase from 1995's 1,587.

Pearl Imada Iboshi, economist with the state Department of Business, Economic Development and Tourism, said the statewide bankruptcies aren't an accurate gauge of Hawaii's economy, since most of the filings are driven by consumer debt.

During the past few years, credit card issuers have been very aggressive in marketing their cards, prompting some isle residents to file for bankruptcy protection when their credit card debts became unmanageable, she said.

Imada Iboshi also noted that bankruptcy filings nationwide have grown over the past several years just as the national economy has grown at a healthy rate.

"I think we've been in a prolonged period of relatively slow growth or no growth, although we do see signs that the economy is beginning to improve," she said. "But it hasn't been exciting growth."

Haxton, who advises 300 to 350 consumers a month on their debt problems, said debtors often are unaware that some creditors will work with them to solve their financial problems.

He said a few credit card issuers will restructure a delinquent debt, waive late fees or waive some interest payments. "The majority of the people we are seeing aren't aware of their overall financial situation. They rob from Visa to pay Mastercard."