The number of bankruptcy filings in Hawai'i jumped by about half in 2008 as an economic downturn, job losses and real estate problems hit consumers and companies.

A preliminary tally of filings at the U.S. Bankruptcy Court in Honolulu show there were 2,069 filings in 2008 as bankruptcies surged to a three-year high. In 2007 there were 1,381 filings.

"The reason they're up is the economy, of course. I'm seeing people losing their jobs, I'm seeing people have their OT taken away," said Ed Magauran, a Honolulu attorney specializing in consumer bankruptcies.

"There's also a lot of people whose houses are under water (loans are more than the house is worth)."

Bankruptcy filings have risen to their highest level since 2005, when the bankruptcy law was amended to make it more difficult for consumers to file for financial relief.

The law change raised the price of filing bankruptcy petitions, required consumers to go through counseling before filing and made it more difficult to discharge some debts through the proceedings.

The numbers of bankruptcies fell immediately after the rule changes but have been slowly rising since that time. In the three years leading up to the law change, there had been 3,000 to 4,400 bankruptcies filed in Hawai'i annually.

Last year, there was an increase in all major bankruptcy categories, including Chapter 11 filings that allow companies to remain operating while working out a payment plan with creditors. The year also was significant in terms of the number of large-business bankruptcies, which included Aloha Airlines, Hawaii Medical Center and Hawaiian Telcom.

Magauran said much of the rise in filings by individuals was cause by real estate problems.

"Either they can't afford their mortgage or they're seeing that the value of their property is less than they owe," he said.

By filing a Chapter 7 bankruptcy, an individual can eliminate dischargeable debt, including any deficiency judgements that banks might seek after taking a house back in foreclosure and selling it, Magauran said.

He said the increase in bankruptcies probably will continue if the economy continues to worsen.

While bankruptcies have been increasing here, the per-capita level is low compared to most states. The Administrative Office of the U.S. Courts shows 1.41 filings per 1,000 residents in Hawai'i during the first nine months of 2008. Only Alaska had a lower rate, at 1.24 filings.