Business planning, Finance, Legal

Single, 40-something men most likely to go bankrupt: Report

Michelle Hammond /

Single men in their 40s are most likely to go bankrupt, new research shows, but a small business expert says this is due to men’s aversion to ask for help as much as their risk-taking nature.

 

The report, titled Profiles of Debtors 2011, contains information on the socio-economic characteristics of people who entered into personal insolvency administrations last year.

 

The report, released by the Insolvency and Trustee Service Australia, shows the majority of debtors were male and employed in 2011.

 

According to ITSA, the most common age range for bankrupts and personal insolvency agreement debtors was 40-44 years, compared to 25-29 years for debt agreement debtors.

 

“The average age of debtors and their unsecured debts have increased since 2003,” Veronique Ingram, Inspector-General in Bankruptcy, said in a statement.

The primary cause of most business-related personal insolvencies was “economic conditions affecting industry”, according to ITSA.

 

The research shows 27% of bankrupts, and 69% of personal insolvency agreement debtors, owed $100,000 or more.

 

Bank creditors were owed the largest proportion of the value of unsecured debt – 41% of bankrupts, 58% of debt agreement debtors and 25% of personal insolvency agreement debtor’s unsecured debt.

 

Credit cards accounted for 21% of bankrupts’ unsecured debt, 18% of personal insolvency agreement debtors’ debt and a record 58% of debt agreement debtors’ unsecured debt.

 

Finally, 64% of bankrupts and 66% of debt agreement debtors had no divisible or realisable assets, compared to 17% of personal insolvency agreement debtors.

 

Peter Strong, executive director of the Council of Small Business of Australia, says first and foremost, the research confirms a lot of people do indeed want to “do their own thing”.

 

The comment comes on the back of the latest employment figures from the Australian Bureau of Statistics, which show the male unemployment rate increased by 0.1 points to 5.2% in August.

 

According to Strong, this could prompt a spike in the number of men starting new businesses.

 

Strong believes male business owners are, by nature, bigger risk-takers than their female counterparts, and the ITSA research reflects that.

 

But he also believes men are less inclined to ask for help when they need it, which could explain the spike in single, 40-something men going bankrupt.

 

“This has been shown in the farming sector. One of the issues affecting men is [their inability to acknowledge they need] help and to admit it to themselves,” Strong says.

 

“It’s a classic male thing – we perceive it as a weakness to say we can’t do something. Men do struggle… and they’ve got to be able to talk to someone about it.”

 

“If your business is suffering, it might be an idea to get advice early… It’s also a message for those health organisations to deal with people [in that situation].”

 

In addition to seeking professional help from a business advisor, Strong believes the best thing business owners can do is to join an industry association.

 

“We are working with various government agencies to get more and more people to join associations,” he says.

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