No one wants to think about bankruptcy, which is understandable considering that bankruptcy will have an effect on your financial condition for several years to come. This may be one of the reasons why lots of people don’t seek financial support in times of need, because they are under the common misconception that bankruptcy is the only way to manage their financial dilemmas. Sadly, this isn’t the case as there are many possibilities available to those facing financial difficulties. What most people don’t understand is the sooner they act, the more solutions 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 number of bankruptcies cases than the last year. In fact, the September 2017 quarter was the ninth continuous quarter where the number of debt agreements increased. Like me, you may be wondering why?

Well, the economy is doing fine with interest rates still at record lows and unemployment steady at 5.6% as of February 2018. Whilst the unemployment statistics aren’t optimal, it’s floating around average levels which certainly wouldn’t lead to 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 grappling any financial hardship, understanding the top causes of personal bankruptcy will give you awareness into what elements of your finances you have to prioritise. Our world is shifting quickly and pinpointing new risks in your own financial scenario will allow 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 remarkable, considering that it is the first time since data collection started in 2007-08 that excessive use of credit has superseded unemployment as the greatest cause of personal bankruptcy.

Naturally, this is an ongoing issue that must be addressed. Banks charge excessive 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 lots of online resources that can assist those with credit card problems. Seeking financial counselling is highly encouraged to educate individuals how to plan and follow a budget.


Unemployment or loss of income continues to be one of the most contributing factors 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 unforeseen resignation or termination. With unemployment rates presently at 5.6%, this leaves many Australians without a regular source of income and relying only on Centrelink payments to continue being solvent. The best way to handle an unpredicted loss of income is to be prepared, which emphasises the importance of establishing an emergency fund that can assist you and your family for three to six months.

Relationship breakdowns

The third greatest cause of personal bankruptcies in Australia originates from relationship breakdowns. Divorce rates are steadily increasing, with the ABS recording 46,604 divorces in 2016. Whilst divorces are not uncommon, financial problems resulting from divorces are common given the affiliated legal costs, child support, and the abrupt transition into a one-income household. Many folks end up 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 difficulties, the fact remains that the sooner you seek financial guidance, the more opportunities will typically 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. Contact the specialists at Bankruptcy Experts Brisbane on 1300 795 575, or alternatively visit our website for further information: