Bankruptcies in March the most in Isles since '05
By Alan Yonan Jr.
Advertiser Staff Writer
The number of bankruptcy cases filed in Hawai'i rose to the highest level in 4 1/4 years in March as consumers and businesses facing rising debt burdens and other recession-induced financial strains continued to seek protection from their creditors.
The 357 filings in March were the most since October 2005, when federal bankruptcy laws were overhauled. Still, the rate of increase was on par with the previous two months, according to figures released yesterday by the U.S. Bankruptcy Court in Honolulu.
March bankruptcy filings were 32 percent higher than the same month a year earlier. That followed year-over-year increases of 29 percent in February and 33 percent in January.
Nationally there were 158,141 U.S. bankruptcy petitions filed March, the most since 2005.
Honolulu bankruptcy attorney Michael Glenn said the bankruptcy court numbers confirm what he has been seeing at his office.
"Bankruptcies are showing zero signs of any slowing. I haven't seen any marked decrease or marked increase," Glenn said.
However, Glenn said he has been seeing an increase in clients whose bankruptcy filings are tied to home foreclosures.
"A lot of it has to do with people having less income because they've been furloughed or lost their job. They could barely afford to pay their bills before and now its impossible," Glenn said.
"It only takes a 10 to 15 percent cut in some people's salary to put them in that position."
Glenn said he expects to see an increase in filings next month when the number of people getting their tax refund rises and they use the money to pay the fees associated with filing for bankruptcy.
Among the more notable businesses filing for bankruptcy in March were the companies that operated the now-defunct Aloha, Hula and O'ahu football bowl games. Aloha Sports Inc. and its parent company, ASI Acquisitions, filed for Chapter 11 protection last week.
The bulk of the filings in March, or 293 filings, were done under Chapter 7 of the U.S. Bankruptcy Code, which involves a straight liquidation of assets to pay creditors.
The bankruptcy court figures also show March filings rose in three of four counties compared with a year earlier.
Filings were up 21 percent to 206 on O'ahu, up 74 percent to 73 on Maui, up 87 percent to 56 on the Big Island and down 21 percent to 22 on Kaua'i.