Even in good economic times. What more when the tide turns?
Bankruptcy on the rise January 15, 2006
SOFTENING house prices and the rising cost of fuel are contributing to a jump in the number of personal bankruptcies in Australia's eastern states.
Figures from the nation's personal insolvency regulator found bankruptcies fell nine per cent nationally in the December 2005 quarter compared with the previous corresponding period.
However, data from the Insolvency and Trustee Services Australia (ITSA) showed a lopsided spread with the eastern states recording sharp rises in bankruptcies.
In NSW, the number of bankruptcies lifted 15.6 per cent while part IX debt agreements - which allow debtors to negotiate payment arrangements with creditors without declaring bankruptcy - increased by up to 12.6 per cent.
Queensland bankruptcies rose 12.3 per cent while Victoria posted a smaller increase of 3.4 per cent. Paul Leroy, from accounting firm Hall Chadwick, said the statistics pointed to increased economic pressure on predominantly eastern seaboard households where home prices were cooling.
And he said Australians needed to be careful about leveraging their real estate in such a soft economic climate and focus on keeping a tight rein of debt levels.
"With the pressure on real estate prices, home owners have been feeling the consequences on the levels of equity in their houses," Mr Leroy said.
"Those people who have been funding their lifestyles by borrowing against their real estate have been feeling the pressure."
ANZ figures show a fall in residential property return for all capital cities.
