HONOLULU — The U.S. stock market had a record bull run in 2019.
But not everyone shared in the wealth.
In Hawaii, bankruptcies rose for the second straight year to finish at the highest level since 2015.
There were 1,666 bankruptcy cases for the year, up 11.8% from 1,490 in 2018 and the most since there were 1,702 in 2014, according to data released Thursday from the U.S. Bankruptcy Court, District of Hawaii. Until the recent uptick, Hawaii bankruptcies had fallen for seven years in a row.
Honolulu bankruptcy attorney Ed Magauran said the cost of living in Hawaii is taking its toll on residents with only a limited number of people benefiting from the rising stock market.
“I don’t think there has been any change in the number of people who have not paid their debt,” he said. “As usual, the bottom 95% continue to suffer. The stock market’s up unbelievable, but the people making money are the top 5% who are owners of public corporations. The other 95% are not making anything, and the last time I checked, in Hawaii a family with two children needs at least three jobs.”
Hawaii’s economy is still growing but the pace has been slowing, according to local economists. Still, the number of bankruptcies filed in 2019 was less than half of its recent post-recession peak of 3,954 in 2010.
“Debt is everywhere,” Magauran said. “Debt is so free and easy to get. You put credit in front of people and they’re going to take it, and they’ll worry about paying it later. They rob Peter to pay Paul until they can’t anymore. Thank God the Bankruptcy Code is there. The U.S. Supreme Court said the purpose of the Bankruptcy Code is for the honest but unfortunate debtor who is entitled to a fresh start.”
For the year there were 1,135 Chapter 7 liquidation filings, up 12.8% from 1,006 in 2018. Chapter 13 filings, which allow individuals with regular sources of income to set up plans to make installment payments to creditors over three to five years, rose 7.5% to 517 from 481. Chapter 11 reorganization filings, which are primarily for business reorganizations, more than quadrupled to 13 from three. There also was one Chapter 12 filing, which is used for reorganization of family farms, compared with none a year ago.
By county, Honolulu filings rose to 1,238 from 1,093, Maui filings increased to 221 from 203 and Kauai filings rose to 74 from 60. Hawaii Island filings ticked down to 133 from 134.
For December there were 131 filings statewide, up 29.7% from 101 in December 2018. Chapter 7 filings soared 38.8% to 93 from 67, Chapter 13 filings gained 2.9% to 35 from 34 and there were three Chapter 11 cases last month compared with none in the year-earlier period.
The three Chapter 11 filings in December were by Antonio Raul Martinez, James Chaim Bond and Trade West Inc., which has 30 employees and does business as Nani Makana Distributors — a designer, importer, manufacturer and distributor. Among Nani Makana’s products are artificial flower lei and hair accessories under the brand name Aloha Hawaii Lei; personal care bath and body products under the brands Forever Florals and Aloha Beauty; sunglasses and accessories under the brand Tropical Shades; and Hawaii-themed gifts and souvenirs under the brands Island Friends and Nani Stufs.
Bankruptcies rose in December in all four major counties. Honolulu County filings jumped to 95 from 75, Hawaii County filings rose to 14 from 11, Maui County filings increased to 17 from 12 and Kauai County filings edged up to five from three.
