Pace of bankruptcy filings loses steam
BY Greg Wiles
Advertiser Staff Writer
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Hawai'i bankruptcy filings increased at their slowest pace in 15 months in August, though they remained at a relatively high level.
Figures released by the U.S. Bankruptcy Court in Honolulu show there was a 38 percent increase in filings last month, or the lowest rise on a percentage basis since May 2008.
Bankruptcies have been rising at a significant clip — more than 40 percent each month — since spring as a series of economic setbacks both locally and nationally took a toll on personal finances. In all, 258 petitions for relief from creditors were filed in August, or 71 more filings than in August 2008.
Honolulu bankruptcy attorney Michael Glenn said people shouldn't read too much into the slowing of the percentage increases. The 38 percent rise last month came atop an almost 50 percent gain a year earlier.
"I wouldn't put anything in that," said Glenn, saying the slowing of increases in filings was probably an anomaly and that he had 10 petitions waiting to be filed on his desk.
"It seems like in the past four or five months it seems almost double. The stigma or shame is disappearing."
Glenn said he is seeing more people with bigger debts compared to a year ago coming in to talk. He said one-third of the people coming in have lost jobs, or had a spouse become unemployed and unable to find another position.
One reason for the larger debts is that some people try to use credit cards to fund their day-to-day expenses while seeking another job and end up going deeper into debt.
"These people I'm seeing now have nothing," said Glenn who advertises himself as being the state's most affordable bankruptcy attorney.
"I've got clients who have less than my teenage daughter."
He said other people coming into his office generally fall into two other groups — those who have mismanaged their finances and others who've had a large debt thrust upon them, such as someone who incurs large medical bills.
The figures released yesterday also show there have been 250 or more bankruptcy filings here for the sixth consecutive month.
August's 258 filings also compares with the 271 filed in June, a 44-month high for the state.
Other court data show:
Hawai'i's filings have been rising, but are still low compared to most of the country. The state had the second-lowest bankruptcy filings per 1,000 people among the 50 states during the year that ended on June 30, though the rate is up from a year earlier.
The Administrative Office of the U.S. Courts released data showing there were 2.07 bankruptcies here per 1,000 population between the start of July 2008 and the end of June 2009.
Only Alaska, with a ratio of 1.38, had a better rate. Nevada had the nation's worst rate at 9.33 per 1,000 people during the 12-month period.
