Hawaii bankruptcies maintain downward trend

State-wide bankruptcies fell for the fourth time in five months and hit the lowest May total in 15 years thanks to an improving economy that saw more people return at work.

The 100 cases in May were down 10.7% from 112 a year earlier, according to new data released by the U.S. Bankruptcy Court, District of Hawaii. This was the smallest number of cases for a month of May since there were 93 in 2006.

In the first five months of 2021, bankruptcies fell 11.2% to 554, from 624 a year ago, as they continue to decline for the second year in a row.

The 19.3% peak in April appears to have been an anomaly, according to Eugene Tian, ​​chief economist at the State Department of Business, Economic Development and Tourism.

“It happened without a cause,” Tian said via email. “In May of this year, the recovery in tourism accelerated. Visitor arrivals in May 2021 were around 74% of the May 2019 level, while the recovery in visitor arrivals in April 2021 was around 57% of the April 2019 level. The improvement in May was significant. If we only look at US visitors, we saw more US visitors in May 2021 than in May 2019. ”

The improving economy can also be seen in the state’s declining unemployment rate, which plunged six-tenths of a percentage point to 8.5% in April as the state created 10,000 jobs. non-agricultural workers.

But as domestic tourism picks up, international visitors to Hawaii are less than 1% of what they were two years ago.

“Those businesses and individuals who depend on international visitors can continue to wait,” Tian said. “The recovery in international tourism will be very slow until the end of the year.”

Tian said the state’s extension of the eviction moratorium would give tenants and landlords an additional 60 days before they decide whether they want to avoid the eviction by filing for bankruptcy.

“But I think the cases would not be many,” he said. “With the opening of our economy, the lifting of travel restrictions and the federal government’s American Rescue Plan Act (ARPA) money, I think bankruptcy filings will remain low for the rest of the year.”

Honolulu bankruptcy attorney Greg Dunn has said he is not sure what will happen for the remainder of 2021, but will “take it as it comes.”

He said in his own practice that bankruptcies in April were up 54% from the previous year, but noticed a sharp drop in May.

“With government assistance programs, people have been able to stay afloat like the 60-day extension of the moratorium on home evictions,” Dunn said via email. “I have also noticed that unemployment benefits have also been extended for many, and the benefits are higher with the additional federal help, which can discourage people from wanting to return to work if they have to have a less job. paid than unemployment. benefits. Jobs are starting to open up and more people are returning to work, but there has also been a build-up of additional debt since the pandemic that people will soon have to face. “

In May, Chapter 7 liquidation records – the most common type of bankruptcy – fell 13.6% to 76, down from 88 in the previous year period.

Chapter 13 deposits, which allow people with regular sources of income to set up plans to make installment payments to creditors over three to five years, rose 9.1% to 24 from 22.

There were no Chapter 11 filings last month, compared to two in the previous year period. Deposits in Chapter 11 are primarily intended for corporate reorganization.

Around the state, bankruptcies were mixed in all four major counties last month. Deposits in Honolulu County fell to 69 from 92, and those in Kauai County fell from six to four. Hawaii County deposits increased from four to six, and Maui County deposits increased from 10 to 21.

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Bankruptcy filings in May are down from a year ago.

2021 2020 PCT. CHANGE

Chapter 7 76 88 -13.6%

Liquidation

Chapter 11 0 2 –

Company reorganization

Chapter 13 24 22 9.1%

People with regular sources of income make plans to pay their creditors over time

Total 100 112 -10.7%

Source: United States Bankruptcy Court, District of Hawaii

Bankruptcy Attorneys in the state of Hawaii

  1. Honolulu
Honolulu Payday Loans
Website Company Telephone Address
edmhawaii.com Ed Magauran attorney (808) 585-1000 Ed Magauran attorney, 1188 Bishop St #2610, Honolulu, HI 96813, United States

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