The bankruptcy rate in Hawaii for September fell almost 30 percent (28.9 percent to be exact), as this represented the largest drop in the category for the state this year.
The decline in filings was led by a 60.2 percent drop in Chapter 13 filings, which was also the largest monthly drop in its category so far this year in the state.
Chapter 13 bankruptcy filings allow individuals with regular sources of income to work out payment plans with creditors and are commonly used by homeowners seeking to prevent foreclosure.
The added decline in Chapter 13 cases is likely due to the fact that the number of foreclosures has dropped in Hawaii after a new law was enacted in May, said bankruptcy attorney Donald Spafford. The law reduced the number of foreclosures in the last four months while the state was setting up a new procedure for mediating foreclosure cases.
“What we could see, once lenders start doing (more) foreclosures, is that Chapter 13s might pick up again,” Spafford said.
This is good news, and even better news is the fact that bankruptcies have decreased in almost every month in 2011 when you compare it to the year-before period.
The year-to-date numbers put 2,613 cases filed in Hawaii for 2011, which represents a 13.6 percent decline from the first nine months of last year.