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More Australians falling victim to debt

More Australians falling victim to debt

Bankruptcies, debt agreements and personal insolvency agreements all rose in the final quarter of 2017, according to new data.

The Australian Financial Security Authority (AFSA) has reported that there were 7,578 new personal insolvencies in the December quarter – up 7.4 per cent on the previous year.

Breaking down the numbers, those 7,578 insolvencies included:

  • 4,029 bankruptcies (up 1.3 per cent)
  • 3,500 debt agreements (up 15.3 per cent)
  • 49 personal insolvency agreements (up 14.0 per cent)

The December quarter was also the 10th consecutive quarter in which debt agreements increased in year-on-year terms.

Reasons for insolvencies

The most common cause of non-business-related personal insolvencies in the December quarter was “excessive use of credit”.

The most common business-related cause was “economic conditions”.

This was based on examining personal insolvencies where the cause could be identified.

AFSA also reported that 17.6 per cent of personal insolvencies in the December quarter were business-related.

Meanwhile, both NSW and Northern Territory posted record numbers of quarterly debt agreements.

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This article was reviewed by Personal Finance Editor Mark Bristow before it was published as part of RateCity's Fact Check process.

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