The Incidence and Causes of Personal Bankruptcy in Australia

JASSA - The Finsia Journal of Applied Finance, Issue No. 4, pp. 27-35, 2016

11 Pages Posted: 3 Apr 2017

See all articles by Paul Ali

Paul Ali

University of Melbourne - Law School

Malcolm Edward Anderson

University of Melbourne - Faculty of Education; Australian Institute of Archaeology

Lucinda O'Brien

Melbourne Law School

Ian Ramsay

Melbourne Law School - University of Melbourne

Date Written: December 31, 2016

Abstract

This paper examines recent trends in Australian personal bankruptcy by analysing a large data set obtained from the regulator, the Australian Financial Security Authority. It demonstrates a marked decline in Australian bankruptcy rates, since a peak in 2009, and a consistent rise in levels of unsecured debt among bankrupts. It identifies a number of distinct cohorts within the bankrupt population, and important differences between men and women, younger and older people, and professional and blue collar workers. We find that the debts of bankrupt individuals tend to fall into two distinct categories: a combination of taxation debts and legal liabilities; or a mixture of personal loan, overdraft and credit card debts, often linked to consumer spending. These findings represent a significant contribution to Australian empirical bankruptcy research. They are also timely, in light of the Commonwealth Government’s recent proposals to implement significant changes to Australian bankruptcy law.

Keywords: Personal Bankruptcy; Consumer Spending; Indebtedness

Suggested Citation

Ali, Paul and Anderson, Malcolm Edward and O'Brien, Lucinda and Ramsay, Ian, The Incidence and Causes of Personal Bankruptcy in Australia (December 31, 2016). JASSA - The Finsia Journal of Applied Finance, Issue No. 4, pp. 27-35, 2016. Available at SSRN: https://ssrn.com/abstract=2943718

Paul Ali

University of Melbourne - Law School ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia
+61 3 8344 1088 (Phone)
+61 3 8344 5285 (Fax)

HOME PAGE: http://www.law.unimelb.edu.au

Malcolm Edward Anderson

University of Melbourne - Faculty of Education ( email )

Alice Hoy Building
Victoria 3010
Australia

Australian Institute of Archaeology ( email )

Melbourne, Victoria 3010
Australia

Lucinda O'Brien

Melbourne Law School ( email )

185 Pelham Street
Carlton, Victoria 3053
Australia

Ian Ramsay (Contact Author)

Melbourne Law School - University of Melbourne ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia
+61 3 8344 5332 (Phone)

HOME PAGE: http://law.unimelb.edu.au/about/staff/ian-ramsay

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