Bankruptcies Down Due to Rise in Debt Agreements

Sydney, NSW -- (SBWIRE) -- 01/21/2013 -- In a sign that the global economic recovery is not moving swiftly, Australians continue to face high levels of personal insolvency. Despite this, bankruptcy figures are down by as much as 20% over the past 5 years.

Debt agreements have taken up that slack, with a reported rise of 68% over the same period.

Debt Agreements were introduced by the Australian government to give struggling Australians an option to get out of unpayable levels of debt without turning to bankruptcy, and it seems many people are taking up that offer.

The figures are as follows:

- Total personal insolvency activity: (7,845) increased by 1.91% against the December quarter 2011 (7,698): a decrease of 4.27% on the September quarter 2012 (8,195).

- Bankruptcies: 5,259 new bankruptcies in the December quarter 2012, a decrease of 5.63% against the December quarter 2011 (5,573) and a decrease of 7.59% on the September quarter 2012 (5,691).

- Part IX debt agreements: 2,510 new debt agreements in the December quarter 2012: the highest number on record for a quarter. In the December quarter 2012, the number of debt agreements increased 23.52% against the December quarter 2011 (2,032) and increased 3.63% on the September quarter 2012 (2,422).

- Part X personal insolvency agreements: 76 new personal insolvency agreements in the December quarter 2012, a decrease of 18.28% against the December quarter 2011 (93) and a decrease of 7.32% on the September quarter 2012 (82).

Nicola Roxon, the Attorney-General, offered her thoughts, remarking that debt agreements allow those in debt the chance to save their home. She said “Debt agreements in many cases can be the smarter way forward, especially as bankruptcy can leave a financial legacy that can affect people for years.”

Whilst this is true, debt agreements do carry a significant financial legacy, and anyone considering entering into one should seek qualified advice before doing so. To learn more about debt agreements, you can visit our debt agreement portal by clicking the following link - http://www.getdebtfree.com.au/debt-agreement.html