Nobody likes to look into bankruptcy, which is easy to understand since bankruptcy will alter your financial situation for years to follow. This may be one of the reasons why individuals don’t look for financial help in times of need, because they are under the general misunderstanding that bankruptcy is the only way to work out their financial issues. Sadly, this isn’t the case as there are many options available to those experiencing financial difficulties. What many people don’t understand is the sooner they act, the more possibilities will be generally be available to them.

In Australia, personal bankruptcies are on the climb again, with the September 2017 quarter marking an 8% increase in the amount of bankruptcies cases than the prior year. In truth, the September 2017 quarter was the ninth consecutive quarter where the amount 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. Although the unemployment numbers aren’t great, it’s floating around average levels which certainly wouldn’t cause an 8% increase in the amount of personal bankruptcies. So, just what has caused 4,236 people to file for 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 aspects of your finances you have to prioritise. Our world is transforming rapidly and identifying new risks in your own financial scenario will help you to proactively address them. To give you some insight, here are the top three causes of personal bankruptcy in Australia in 2017.

Excessive use of credit

The leading cause of bankruptcy in Australia today arises from excessive use of credit. This is remarkable, since it is the very first time since data collection started in 2007-08 that excessive use of credit has taken over unemployment as the greatest cause of personal bankruptcy.

Naturally, this is an ongoing issue that needs to be addressed. Banks charge enormous fees and interest charges for late credit card repayments, so if you’re already behind in your credit card repayments, take action now. The Government’s MoneySmart website ( has plenty of online resources that can assist those with credit card issues. Seeking financial guidance is highly recommended to educate individuals how to plan and stick to a budget.


Unemployment or loss of income continues to be one of the most contributing elements of personal bankruptcy. This doesn’t come as a suprise considering that many Australian’s don’t have income insurance or an emergency fund which they can use if they experience an unanticipated resignation or termination. With unemployment rates presently at 5.6%, this leaves many Australians without a stable income source and relying only on Centrelink payments to continue to be solvent. The best way to tackle an unplanned loss of income is to be prepared, which highlights the importance of putting together an emergency fund that can assist you and your family for three to six months.

Relationship breakdowns

The third leading cause of personal bankruptcies in Australia originates from relationship breakdowns. Divorce rates are progressively 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 sudden transition into a one-income household. Many people end up inheriting debts from their partners or are unable to pay off existing credit because their costs have dramatically increased.

Looking ahead

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