New figures from Insolvency and Trustee Service Australia show that bankruptcies are set to hit a record high, despite Australia’s buoyant economic times. In the three months to September 2007, there were 6330 new bankruptcies, up 4.23% compared to the corresponding period last year.
Just over 1600 new debt agreements were entered into during the September quarter, up 6.7% on the previous year and there were 47 new personal insolvency agreements in the September quarter, up from 44 in the September quarter last year. Overall personal insolvency increased by 4.7% in the September quarter compared to the September quarter last year.
Giulia Inga, official receiver for NSW and ACT, from Insolvency and Trustee Service Australia says there is a long term trend of rising bankruptcies. “People are over- extending themselves through unsecured debt, rather than housing loans.”
The total bankruptcies for 2006-07 was just over 25,000, and this year the figure is heading for more than the 1998-99 peak of 26,000 bankruptcies.
Credit industry observers say people are running out of options to refinance their debts because of the credit squeeze following the US sub-prime crisis. And there is growing concern about people who are getting access to their superannuation to fix short term debt crises, and merely deferring their problems.
Smart Company is the leading online publication in Australia for free news, information and resources catering to Australia’s entrepreneurs, small and medium business owners and business managers.
