Personal insolvencies have increased significantly over the past two decades and have spread from unskilled workers to the middle class, a new report has found.
According to the University of Melbourne’s Centre for Corporate Law and Securities Regulation, personal insolvencies grew by 261 per cent between 1990 and 2008, from a rate of 9,113 to 32,865.
The proportion of bankruptcies that originate with the middle class has also swelled from 11.3 per cent in 1999 to 27.3 per cent in 2008.
The report noted that the increase in insolvency frequency took place over a period of generally low interest rates which indicated insolvencies were not just a result of the current economic environment.
Instead, the report suggested that unemployment, excess use of credit, gambling and ill health were the most influential factors behind the rise.