Hawai'i bankruptcy filings are continuing to pile up, with the number reaching its highest monthly total in three-and-a-half years as consumers and businesses struggle with the economic downturn.

Figures compiled by the U.S. Bankruptcy Court in Honolulu show there were 270 bankruptcy petitions filed in March, or about 70 percent more than a year earlier. That was the most on a monthly basis since a spike that occurred in October 2005 just prior to changes that made it more difficult and expensive to seek relief from creditors through bankruptcy.

Hawai'i bankruptcy filings accelerated during the second half of last year as the credit crisis and then Wall Street turmoil slowed the economy. The filings have increased by more than 60 percent each month since September when comparing the month's totals against the same period a year earlier.

At the law offices of Marvin Dang, a Honolulu attorney who helps banks, credit card companies and others collect problem debts, work has increased over the past year. Dang said that more people are experiencing financial problems because they've had their hours cut at work, lost a job, or run up debt.

At the same time, creditors are also shifting practices given the jump in bankruptcies, he said. Instead of risking the debts being discharged through insolvency, creditors are more willing to work with people having problems making payments, he said.

"It seems that our clients are being more flexible because of the economic situation and are actually willing to accept in appropriate cases lower settlements than they would have been willing to accept a year or two ago," Dang said. In some cases that means the banks also may be willing to work out a payment plan over several months, he said.

The number of bankruptcies also increased by 70 percent during the first three months of 2009 compared with the same 2008 period.

Bankruptcy filings have been increasing nationally. Hawai'i's increase, while large on a percentage basis, has been small compared to some other states. Hawai'i's per-capita bankruptcy rate is one of the lowest in the nation.

A report by the Administrative Office of the Courts found Hawai'i bankruptcy filings per capita is the lowest behind Alaska. Hawai'i had a filing rate of 1.41 for every 1,000 residents in the 12 months ended Sept. 30. That was less than half of the national average of 3.38.