Cheap bankruptcies booming

Total insolvency activity was up sharply in the March 2009 quarter, according to statistics released on Tuesday by the federal government bankruptcy registrar, the Insolvency and Trustee Service Australia.

Bankruptcies were up 13.7 per cent over the figures from the March quarter of 2008 and more than seven per cent up from the December quarter to 7164.

The number of part nine debt agreements signed was up 36.6 per cent on last year and 3.2 per cent on the December quarter to 2055 agreements entered into nationally.

The number of part ten personal insolvencies was up almost 40 per cent on last year and 30 per cent on the December numbers to 81 cases nationally. There are more part ten insolvencies in Victoria than in the rest of the nation combined.

There was strong growth in insolvency activity across all states, with Western Australia notching up 83 per cent growth in part nine debt agreements.

Growth in the number of part nines signed was also strong in Victoria - 38.4 per cent up on last year - and NSW (35 per cent).

Melbourne based insolvency practitioner John Beecroft from www.debtassist.com.au said he had been referring more people lately to trustees for part ten insolvencies.

"Now about thirty to forty per cent of our enquiries are over the limit for part nines. When rates and fuel prices were high we were seeing lots of people from the outer suburbs, now we are seeing more people from middle class suburbs and above.

"People who have used their credit cards to buy shares and had a margin call is pretty common," said Beecroft, "or property investments that have gone wrong."