Bankruptcies are on the rise. The Insolvency and Trustee Service of Australia’s annual report reveals there were 31,971 new insolvency administrations compared with 27,329 in 2005-06, an increase of 16.9%.
This number included 25,238 new bankruptcies, up from 22,299 in 2005-06, 6516 debt agreements, up from 4848 in 2005-06, and 217 personal insolvency agreements, up from 182 in 2005-06.
About 20% of bankruptcies were business related. Economic conditions (33%), lack of business ability (11%) personal reasons including health (10%) and excessive drawings (10%) were cited as the main causes of bankruptcy by these debtors.
But the main reason for the rising number of personal insolvencies is unemployment and excessive use of credit cards. Credit cards now account for 27% of bankruptcies, up from 11% seven years ago.
Education, health and – amazingly – IT professionals were over-represented in the figures. And contrary to the stereotype, people aged over 54 made up 20% of bankrupts.
Causes of bankruptcy for business
See Insolvency and Trustee Service for full table.