Nobody likes to think about bankruptcy, which is understandable given that bankruptcy will influence your financial situation for years to follow. This may be one of the reasons why a lot of people don’t seek financial support in times of need, because they are under the popular misconception that bankruptcy is the only way to address their financial issues. Unfortunately, this isn’t the case as there are many choices available to those coping with financial difficulties. What most people don’t recognise is the sooner they act, the more solutions will be generally be available to them.

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In Australia, personal bankruptcies are on the rise again, with the September 2017 quarter indicating an 8% increase in the amount of bankruptcies cases than the last year. As a matter of 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 record lows and unemployment steady at 5.6% in February 2018. Even though the unemployment figures aren’t optimal, it’s hovering around average levels which definitely wouldn’t lead to an 8% increase in the amount of personal bankruptcies. So, just what has caused 4,236 people to declare bankruptcy in the September 2017 quarter?

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

Excessive use of credit

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

Naturally, this is an ongoing issue that must be addressed. Banks charge exorbitant fees and interest charges for late credit card repayments, so if you’re currently overdue in your credit card repayments, act now. The Government’s MoneySmart website ( has loads of online resources that can help those with credit card concerns. Seeking financial guidance is strongly recommended to educate individuals how to plan and stick to a budget.


Unemployment or loss of income remains to be one of the most contributing aspects of personal bankruptcy. This doesn’t come as a suprise given that many Australian’s don’t have income insurance or an emergency fund which they can use if they encounter an unplanned termination or resignation. With unemployment rates currently at 5.6%, this leaves many Australians without a reliable income source and depending only on Centrelink payments to remain solvent. The best way to tackle an unplanned loss of income is to be prepared, which accentuates the importance of establishing an emergency fund that can support you and your family for 3 to 6 months.

Relationship breakdowns

The third biggest cause of personal bankruptcies in Australia stems from relationship breakdowns. Divorce rates are progressively increasing, with the ABS recording 46,604 divorces in 2016. While divorces are not uncommon, financial problems arising from divorces are common given the associated legal costs, child support, and the rapid transition into a one-income household. Many folks find themselves inheriting debts from their partners or are not able to pay off existing credit because their expenditures have substantially increased.

Looking ahead

Irrespective of the reasons for your financial troubles, the fact remains that the sooner you seek financial help, the more possibilities will usually be available to you to resolve these issues. Lots of people grapple 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 Gympie on 1300 795 575, or alternatively visit our website for additional information: Bankruptcy Gympie