Hawaii’s
bankruptcies
still falling

But the decrease is not
as pronounced as it was
a couple years ago

While Hawaii's healthy economy caused statewide bankruptcies to tumble 6.6 percent during the first quarter this year from last year, the drop has been leveling off.

A total of 778 people and businesses filed bankruptcy during the first three months this year, down from 833 in the first quarter of 2004, according to preliminary counts from the U.S. Trustee's Office, which oversees bankruptcy cases.

"It's another reading that is very strong on the Hawaii economy," said Leroy Laney, a professor of economics and finance at Hawaii Pacific University.

Statewide bankruptcies have continued to drop while growth in Hawaii's tourism, construction and real estate industries has resulted in greater personal income and more jobs, Laney said. Local consumers are in a better economic position and fewer of them are going to bankruptcy court to stave off creditors.

As the number of statewide bankruptcies has decreased, so too has the percent that they've fallen. In first quarter of 2003, bankruptcies dropped 17.8 percent.

"I expect statewide bankruptcies will continue to fall, but at a lower rate for the reminder of the year," Laney said. "The tone of the economy here is still quite strong, but the expansion is maturing, and even in the best of economies, you'll still have a few bankruptcies."

Chapter 13 wage-earner bankruptcies dropped 15.4 percent to 77 during the first quarter of this year from the year-earlier, while Chapter 7 liquidation filings fell 6.4 percent to 691.

Bankruptcies in the form of Chapter 11 reorganizations increased to 10 from four a year earlier.