Melbourne- the debt capital of Australia
October 28th 2008 00:54
The thousands of dollars on offer from the federal government for families looks likely to be eaten up by the extreme debt loads now being carried by average Victorian households.
The number of consumers getting into trouble with unsecured debts is rising strongly with debt agreement administrators reporting that average debt loads are also rising.
The federal government bankruptcy agency, the Insolvency Trustee Service of Australia, reported last week that the number of part nine debt agreements entered into during the three months to the end of September rose 7.94 per cent compared to the June quarter to 2202 nationally.
The number of consumers with consumer debt loads above the $80,000 limit for part nine agreements is rising as well, forcing them into part ten personal insolvency agreements.
Off a low base, part ten personal insolvency agreements are up 138 per cent compared to last year’s September quarter figures and 8.74 per cent compared to the June quarter.
Melbourne’s outer suburbs, particularly the outer eastern suburbs, continue to feel the brunt of Australia’s consumer debt crisis. There were 71 part ten agreements entered into in Victoria during the quarter, up from 15 during the same period last year.
“The consumer debt problem is spreading inwards from Cranbourne, Narre Warren and the far outer east to the middle income, middle suburbs,” says debt agreement administrator John Beecroft.
“And the debts are getting bigger, I think we are in for a horror Christmas and new year period for insolvency activity.
“And it is not just the battling families getting into trouble, this nis well and truly affecting middle class families now as well.
“Adding to the problem, quite frankly is the toughening up of the attitude of creditors. They are using the ‘all monies’ rules pretty ruthlessly and being pretty quick to take action.”
The “all monies” rule is usually buried deep in the terms and conditions of credit cards and personal loan contracts that consumers sign with banks. The rule allows the bank or lender to take any money the consumer holds in other bank accounts if they default on repayments.
The number of consumers getting into trouble with unsecured debts is rising strongly with debt agreement administrators reporting that average debt loads are also rising.
The federal government bankruptcy agency, the Insolvency Trustee Service of Australia, reported last week that the number of part nine debt agreements entered into during the three months to the end of September rose 7.94 per cent compared to the June quarter to 2202 nationally.
Off a low base, part ten personal insolvency agreements are up 138 per cent compared to last year’s September quarter figures and 8.74 per cent compared to the June quarter.
Melbourne’s outer suburbs, particularly the outer eastern suburbs, continue to feel the brunt of Australia’s consumer debt crisis. There were 71 part ten agreements entered into in Victoria during the quarter, up from 15 during the same period last year.
“The consumer debt problem is spreading inwards from Cranbourne, Narre Warren and the far outer east to the middle income, middle suburbs,” says debt agreement administrator John Beecroft.
“And the debts are getting bigger, I think we are in for a horror Christmas and new year period for insolvency activity.
“And it is not just the battling families getting into trouble, this nis well and truly affecting middle class families now as well.
“Adding to the problem, quite frankly is the toughening up of the attitude of creditors. They are using the ‘all monies’ rules pretty ruthlessly and being pretty quick to take action.”
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