FED:Bankruptcy falls despite higher rates

AAP General News (Australia)
04-11-2011
FED:Bankruptcy falls despite higher rates

CANBERRA, April 11 AAP - Bankruptcy levels have fallen to the lowest point since 2005
despite higher interest rates, official figures show.

Individuals struggling with debt appear to have survived the worst of the global financial
crisis, although it's too early to judge the effects of summer's natural disasters.

The number of bankruptcies fell by 17.4 per cent in the year to March 2011, even though
the Reserve Bank of Australia raised rates three times in that period.

Australia's 5422 new bankrupts comprise the lowest number since late 2005.

The total number of personal insolvencies, which include bankruptcy cases, dropped
by an annual pace of 16 per cent to 7351.

This marked the fifth consecutive quarter of decline.

The good news was experienced in every state and territory, except Tasmania.

The latest figures from the government's insolvency administrator, Insolvency and Trustee
Service Australia, show a sharp turnaround from the GFC.

In 2007 and 2008, the tally of insolvency cases was growing at an annual pace of 10
per cent, on average.

Still, Federal Attorney-General Robert McClelland said the summer of natural disasters
in Queensland could push up the number of insolvencies.

"While these are strong figures, we need to bear in mind that recent natural disasters
have had a significant impact on the economy," he said.

"It is possible this may be reflected in future figures."

AAP saj/nb

KEYWORD: INSOLVENCY

� 2011 AAP Information Services Pty Limited (AAP) or its Licensors.