The Geography of Bankruptcy in Australia
American Bankruptcy Institute Law Review, Vol 28, No. 2, 2020, pp. 303-325
21 Pages Posted: 21 Oct 2020
Date Written: January 14, 2020
This study analyzes a unique data set to explore geographic variations in bankruptcy across Australia, drawing upon United States research that points to striking differences between urban and rural bankruptcies. The U.S. research finds that rural debtors enter bankruptcy in much more severe financial distress than their urban counterparts. The present study draws upon data obtained from the Australian Financial Security Authority, as well as data gathered by the Australian Bureau of Statistics. It finds that, compared with debtors in regional areas, debtors in major cities earn higher incomes, are more likely to be employed and more likely to cite the "excessive use of credit," rather than unemployment, as the cause of their financial problems. In most respects, however, it finds that differences between Australian bankruptcies in urban and non-urban locations are neither consistent nor pronounced. It concludes that broad generalizations about financial hardship in regional areas cannot do justice to the complex geography of bankruptcy in Australia. In this sense, the study poses a contrast to the U.S. research, which identifies stark differences between urban and rural debtors. It offers a nuanced account, one that links bankruptcy rates to localized factors such as housing prices and the impact of specific industries, such as mining.
Keywords: bankruptcy; geography; financial hardship
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