Australians are being hit hard by bankruptcy, as more Australians declared bankruptcy in the last financial year.
More than 32.350 Australians declared bankruptcy during the 2017-18 financial year according to a report by data registry and analytics business illion on Tuesday, with a 4 per cent increase across the nation over the last 12 months.
Queensland recorded the highest number of bankruptcies throughout the country with 9,415, rising 1.5 per cent more than the year before.
However, Western Australia recorded the sharpest increase in Australia at 11.7 per cent.
WA suburb Baldivis had the most bankruptcies with 105.
South Australia recorded a minimal increase at 0.9 per cent, while Victoria was the only state with a decrease with a decline of 2.2 per cent.
Illion claimed the cause was a rise in debt, stagnant wage growth and falling house prices.
“Sydney’s declining property market and the significant rise in personal bankruptcies could be mirrored in 2019, as its property market is showing signs of following the same downwards trajectory,” illion chief executive Simon Bligh said.
“At the same time, economies in Western Australia and Queensland have turned a corner recently, with property markets stabilising and resurgent resources prices.”
“Yet according to analysis, a significant number of households are still doing it tough in these states.”
Financial planner and Curtin University instructor Elson Goh said the figures reflected a growing number of young people affected by financial bankruptcy.
He said younger people were heavily affected.
“The people who are filing for bankruptcies are getting younger,” Mr Goh said.
“If you look at the profile of the suburb of Baldivis, its mainly made up of young families and particularly children under the age of 14 years.”
“That suburb has got about 30 per cent of young people. So you can see that young people are probably one of the hardest hit in terms of having to meet the financial stress and strains.”
Mr Goh said they experienced increasing debt that affected their household.
“Debt arrangements have gone up and its gone up quite significantly over the last seven quarters.”
“People are not only struggling with big ticket items like mortgages but they are also struggling with the day to day running of the household.”
He said young people were spending heavily but believed they should be saving and changing their spending habits including post paying services such as Afterpay.
“The message to young people is probably to look at spending on what you can afford,” Mr Goh said.
“Obviously trying to borrow as little as they can, save up for the deposit, a bigger deposit means you’ve got a bigger buffer.”
“If there something that’s way beyond your means, I suppose you either wait and save up for it, or perhaps go for something else a bit cheaper, even things like buying your first home.”