Posted on: Saturday, October 2, 2004

Fewer in Hawai'i going bankrupt

By Sean Hao
Advertiser Staff Writer

With a stronger economy generating higher incomes and more jobs, fewer people in Hawai'i are filing for bankruptcy.

Through September, filings for all types of bankruptcy in Hawai'i fell nearly 19 percent, to 2,358, compared with 2,907 in the year-earlier period, according to the U.S. Bankruptcy Court in Honolulu.

The state's bankruptcy rate has generally fallen after spiking in the aftermath of Sept. 11, and comes amid an economic expansion driven by strength in real estate, construction and tourism.

Those strengths brought the jobless rate down to 2.9 percent in August — a 13-year low.

Other likely factors are rising home values and relatively low interest rates, which allow people to refinance or take equity out of their homes to pay bills, said Wendy Burkholder, executive director for Consumer Credit Counseling Service of Hawai'i.

"That's good — if you don't incur any further debt," said Burkholder, whose agency helps people manage their debt. "They've got to get rid of the shovel that digs the hole."

Burkholder said debt levels of agency clients are rising — from an average of $11,000 in unsecured debt about six years ago to $18,000 today.

"I don't think they're running into trouble any less," Burkholder said. "I'm not seeing any decrease in the debt load."

Reach Sean Hao at shao@honoluluadvertiser.com or 525-8093.