Statewide bankruptcy filings swelled to 291 in February and marked the second-highest number of monthly filings since a looming law change fomented a flood of 1,463 filings in October 2005. The highest since then was the 321 cases filed in December.

Credit card debt “;and of course the foreclosure situation is also causing a lot of people to consider bankruptcy,”; said Khaled Mujtabaa, a Honolulu attorney who handles bankruptcy, family law and other types of cases.

The 28.8 percent increase in February put the total number of filings for the first two months of this year at 567, a 30.6 percent increase over the 434 filed through the same period in 2009.

Chapter 7 liquidation, the most common type of bankruptcy, rose 27.1 percent to 239 from 188 a year ago, while Chapter 13 filings increased 41.7 percent to 51 from 36. In Chapter 13 cases, debtors with regular sources of income set up plans to repay creditors over time.

Only one Chapter 11 reorganization case was filed during the month, in Maui County. Chapter 11 is more commonly used by companies seeking to reorganize debt while continuing to do business, but it also can be used by individuals who don't fit the eligibility requirements for a Chapter 13 filing, said Michael Dowling, U.S. Bankruptcy Court clerk.

Four companies filed for Chapter 7 bankruptcy liquidation in February, two on Maui and two on the Big Island.

Mujtabaa said there are “;advantages”; to filing.

“;That may seem a misnomer, but in a situation where someone is behind three, four or five months and $10,000 to $15,000”; and has regular income, “;a Chapter 13 bankruptcy might work well for them,”; he said.

Homeowners who wind up unemployed or underemployed and behind on their mortgage payments are often surprised to learn about “;the legal options they have available to save their homes,”; Mujtabaa said.

“;The most serious strike against their credit is, the bankruptcy is there for 10 years. However, it doesn't mean they can't get credit again, (but) they'll have more difficulty.”;

Credit card companies often pepper debtors with applications in the mail, knowing they will not be able to file for bankruptcy again for six to eight years. Mujtabaa cautions people against succumbing to unsolicited credit card offers.

Filings tend to be cyclical, depending on the time of year.

“;Between Thanksgiving and the end of February, there is normally a drop-off. ... Then starting in late February, early March, it begins to pick up. I'm expecting it to pick up,”; he said, as debts racked up over the Christmas and New Year's holidays start to overwhelm people.