Credit card debt is considered one of the biggest causes of bankruptcy.
Credit card debt is considered one of the biggest causes of bankruptcy.

Unemployment and credit debt biggest cause of bankruptcy

UNEMPLOYMENT and credit card debt were the biggest causes behind Sunshine Coast people being declared bankrupt in the final months of 2014.

Australian Financial Security Authority figures show 120 people across the Buderim, Caloundra, Maroochy, Nambour-Pomona, Noosa and Sunshine Coast hinterland areas were declared insolvent in the 2014 December quarter.

Over the same period, there were 29 business related personal insolvencies - including sole traders and contractors.

Insolvency accountant Morgan Lane said areas such as Buderim, Caloundra and Maroochydore had seen increased consumer insolvency, while Noosa, Nambour and the hinterland, which had more stable industries like agriculture, saw insolvency drop.

"Consumer bankruptcy is more in the working type areas on the Sunshine Coast," he said. "Buderim, Caloundra, Maroochydore - they're all places where some youth unemployment can come through."

The AFSA reinforced his view, stating unemployment was consumer insolvency's leading cause nationally.

Mr Lane said after people lost their jobs, they eventually spent their savings and relied on credit - which could not last long.

"Non-business related insolvency is driven by credit card debt mostly," he said.

"When people lose their jobs, there's also a time lag on people getting into problems.

"People have some degree of savings and then they get into their credit cards."

While the total personal insolvency on the Coast in the December quarter decreased on 2014's September quarter - with drops in Nambour and the hinterland leading the way - non-business related consumer insolvency grew over the period.

December quarter 2014 personal insolvencies in regional Queensland

  • Sunshine Coast - 149
  • Townsville - 95
  • Toowoomba - 43
  • Rockhampton - 49
  • Hervey Bay - 27


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