Nobody likes to look into bankruptcy, which is understandable considering that bankruptcy will bear upon your financial condition for years to follow. This may be one of the reasons why individuals don’t seek financial guidance in times of need, because they are under the common misconception that bankruptcy is the only way to address their financial problems. Sadly, this isn’t the case as there are many solutions available to those coping with financial difficulties. What lots of people don’t recognise is the sooner they act, the more opportunities will be typically be available to them.

In Australia, personal bankruptcies are on the rise again, with the September 2017 quarter recording an 8% growth in the amount of bankruptcies proceedings than the prior year. In fact, the September 2017 quarter was the ninth successive quarter where the number of debt agreements increased. Like me, you might be wondering why?

Well, the economy is doing fine with interest rates still at an all-time low and unemployment steady at 5.6% as of February 2018. Even though the unemployment figures aren’t exemplary, it’s floating around average levels which certainly wouldn’t bring about an 8% increase in the amount of personal bankruptcies. So, exactly what has caused 4,236 people to file for bankruptcy in the September 2017 quarter?

If you’re dealing with any financial hardship, understanding the top causes of personal bankruptcy will give you awareness into what components of your finances you should prioritise. Our world is evolving quickly and recognising new risks in your own financial circumstance will enable you to proactively manage them. To give you some insight, here are the top 3 causes of personal bankruptcy in Australia in 2017.

Excessive use of credit

The top cause of bankruptcy in Australia today arises from excessive use of credit. This is notable, since it is the very first time since data collection began in 2007-08 that excessive use of credit has overtaken unemployment as the number one cause of personal bankruptcy.

Clearly, this is an ongoing issue that ought to be addressed. Banks charge exorbitant fees and interest charges for late credit card repayments, so if you’re currently behind in your credit card repayments, do something about it now. The Government’s MoneySmart website ( has lots of online resources that can help those with credit card concerns. Seeking financial counselling is strongly advised to show individuals how to plan and follow a budget.


Unemployment or loss of income remains to be one of the most contributing elements of personal bankruptcy. This doesn’t come as a suprise because many Australian’s don’t have income insurance or an emergency fund which they can use if they encounter an unplanned resignation or termination. With unemployment rates currently at 5.6%, this leaves many Australians without a steady source of income and depending only on Centrelink payments to continue being solvent. The best way to cope with an unpredicted loss of income is to be prepared, which highlights the importance of developing an emergency fund that can assist you and your family for three to six months.

Relationship breakdowns

The third biggest cause of personal bankruptcies in Australia derives from relationship breakdowns. Divorce rates are continuously increasing, with the ABS recording 46,604 divorces in 2016. While divorces are not uncommon, financial problems caused by divorces are common given the affiliated legal costs, child support, and the rapid transition into a one-income household. Many individuals find themselves inheriting debts from their partners or are incapable of paying off existing credit because their costs have significantly increased.

Looking ahead

Regardless of the reasons for your financial problems, the fact remains that the sooner you seek financial guidance, the more possibilities will typically be available to you to resolve these issues. Lots of individuals wrestle with debt for years before seeking help. If you’re juggling your finances and avoiding phone calls, don’t wait any longer. Speak with the specialists at Bankruptcy Experts Rockhampton on 1300 795 575, or alternatively visit our website for more information: