Isle bankruptcies
stabilize in quarter

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By Lyn Danninger
ldanninger@starbulletin.com

The number of bankruptcy filings in Hawaii remained relatively steady for the first quarter of 2002.

A total of 1,234 bankruptcies were filed for the period, down 4.9 percent from 1,298 bankruptcies during the same period last year.

Of those, 1,093 filings were Chapter 7 liquidation bankruptcy. The quarterly figure decreased 7.8 percent from first quarter 2001's 1,185 filings.

Chapter 13, wage-earner bankruptcies where an individual pays debts out of future income, increased 22 percent, to 133 this year from 109 a year ago.

Chapter 11 filings, mostly corporate re-organizations, rose to 8 filings from 4 filings in first quarter 2001.

A total of 5,025 bankruptcy filings were recorded during all of 2001.

Blake Goodman, one of the state's busier bankruptcy attorneys, said he expects filings to remain steady.

Many of those now consulting him are unemployed and are former travel and tourism workers affected by the events of Sept. 11, Goodman said.

"I'm seeing much more unemployment, more than I've ever seen in my practice," he said. "Half of the cases I file now are for people on unemployment."

Goodman is still expecting federal legislation making filing for Chapter 7 more difficult to eventually pass. Right now it is stalled in a conference committee.

The Senate voted 83-15 last year to approve the bankruptcy reform act.

Because of differences with a similar bill already passed in the House, the bill moved to conference committee where it still sits.

The new legislation would take full effect within about six months of the president's signature.

If the law passes, the number of Chapter 7 filings may jump as people decide to file before the newer, stricter law goes into effect, Goodman said.