AUSTRALIAN’S PERSONAL DEBT – WARNING SIGN STILL OUT IN 2010

Personal bankruptcies in the December quarter were up only slightly from a year before.

There were 6,770 new bankruptcies in the December quarter, an increase of 2.1 per cent from the pervious December quarter, the Insolvency and Trustee Service Australia (ITSA) said on Thursday.

ITSA is the federal government agency responsible for administering and regulating the personal insolvency system in Australia.

Bankruptcies were down by 7.6 per cent from the September quarter.

That exaggerates any underlying decline, because the figures are not seasonally adjusted and there has almost always been a fall between the September and December quarters despite a strong rising trend over the past two decades.

Even so, the quarterly fall was larger than average of drop of 4.5 per cent for the preceding five December quarters.

Coupled with the relatively slow annual rise compared with a average annual rise of 6.8 per cent in the preceding half-decade, the figures do hint at some levelling off in bankruptcies as the economy began to recover.

ITSA also said the were 1,954 new debt agreements made under Part IX of the bankruptcy Act in the December quarter, down by 12.5 per cent from the September quarter and by 1.9 per cent on the previous December quarter.

There were 156 new personal insolvency arrangements made under Part X of the Act, more than double the level a year before and up by four per cent from the September quarter.

These forms of insolvency activity totalled 8,880 in the December quarter, up by 2.2 per cent from a year before but down by 8.6 per cent from the September 2009 quarter.