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Bankruptcy filings,
foreclosures drop
in isles

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By Rob Perez
Star-Bulletin

In another sign of an improving economy, the number of bankruptcy cases filed statewide dropped 16 percent in 2000.

Attorneys who handle bankruptcies said the growing job market and rising real-estate values contributed to the decline in bankruptcy filings.

By the close of business yesterday, 4,527 cases had been filed with the U.S. Bankruptcy Court here, compared with 5,411 for 1999.

"More people are working, so more people can pay their bills," said Gayle Lau, assistant U.S. trustee.

Property foreclosures also declined, another reflection of better economic times, officials said. Based on totals through November, the state Judiciary projected 2,117 cases would be filed for all of 2000, a nearly 28-percent drop from last year.

Others said the rising popularity of nonjudicial foreclosures -- a less costly, less time-consuming process that doesn't involve the courts -- contributed to the declines in judicial foreclosures and bankruptcies.

Dawn Smith, a bankruptcy attorney, agreed that the improving economy is helping reduce the number of bankruptcy filings.

"There's a general euphoria catching up with us," she said.

But Smith said she still is seeing lots of cases in which people are overextending their credit and getting deeper into debt.

Attorney Eduardo Zabanal, who handled about 100 bankruptcies this year, said more clients are getting into trouble because of credit cards.

Smith said improving real-estate values mean she is handling fewer bankruptcies in which people have to give up their homes.

Of the 4,527 bankruptcy cases filed with the court, 4,017 of them -- or nearly 89 percent --were Chapter 7 personal bankruptcies.

The decline in overall filings mirrors what is happening nationally.

Despite the improvement, the total for this year still is the third highest on record in Hawaii, which hit a peak in 1998 with 5,813 bankruptcies.