Bankruptcy rate climbs

A new record may be achieved for bankruptcies this financial year with 8,001 people becoming insolvent in the three months to September. The figures which include bankruptcies and debt agreements are 5 per cent higher than for the same time last year. Increasing numbers of people are applying to access their superannuation early on grounds of “financial hardship” but the Consumer Credit Legal Centre has warned that this is only a temporary solution and is likely to result in worse financial problems at a later stage. A financial counsellor at Credit Line said that some people are using their credit cards to pay mortgages that were larger than the value of their property and that some financial institutions were issuing credit cards with limits up to $30,000. Last financial year nearly 32,000 people became insolvent.