Bankruptcy hits young
YOUNG adults are going bankrupt at a record rate.
An explosion in easy access to credit, online services and buy now-pay later schemes is causing snowballing debts among young people.
Many don’t realise that a bankruptcy leaves a permanent black mark and could stop them travelling overseas.
A new analysis by credit agency illion has found that there were 784 bankruptcies for 18-to-24-year-olds in the September quarter, up from 123 just four years ago. In most states, young bankruptcies are five times higher than they were in 2014. The chief executive of illion, Simon Bligh, said many young people had little or no significant assets to lose, so there were fewer incentives to avoid bankruptcy.
“More people are accessing credit at a younger age, entering financially binding contracts for digital subscription services to access music, movies, TV shows, online shopping and gaming accounts,” he said.
“Financial literacy among the young is poor, which is a key factor behind debts snowballing to the point where they become insurmountable.”
The 18-to-24 age group was the only bracket where women outnumbered men for bankruptcies, the analysis found. Overall bankruptcies for all Australians in the three months to September 30 totalled 7400, down 9.5 per cent. before heading overseas.
• They might have to make compulsory payments when wages exceed a figure.
• People’s names permanently appeared on the National Personal Insolvency Index public register.