Tuesday, October 04, 2005

Borrowers 'Stampede' Honolulu Bankruptcy Court

The Star Bulletin looks at the surge of defaults in Hawaii. "Debt-ridden consumers are stampeding Honolulu's bankruptcy court to beat an Oct. 17 deadline, when a new federal law will make it harder for people to wipe out their credit card debts and other obligations by filing for bankruptcy protection. The total number of bankruptcies filed statewide in September surged to 574, nearly triple the 204 filed in September 2004."

"During the quarter ended in September, more than 1,200 people or companies filed for protection in Honolulu. That was a 78 percent increase over the same quarter in 2004."

"'We've been seeing three to four times as many people as we generally do,' said Dawn Smith, a Honolulu bankruptcy lawyer who said the number of clients she is seeing has risen from six per day, at most, to 15 to 20. 'We're basically open all the time now, practically.'"

"Smith said she had a client who had a monthly income of $400 but still managed to rack up $60,000 in credit card debt. 'Charge cards have made it so easy to charge, but once you've done it, you're in their clutches,' she said."

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