Excessive debt run up on easy credit is causing concern.
The number of people declared bankrupt or entering into agreements with creditors jumped 16.4 per cent last year, with higher interest rates and excessive debt to blame.
The Inspector-General in Bankruptcy, Peter Lowe, yesterday said the number of people getting into trouble with their creditors had been rising since 2002-03. "There has been a resurgence of bankruptcy activity. It is not astronomical but it is happening," he said.
During 2006, 23,840 people went bankrupt while a further 5800 entered formal agreements with their creditors.
The number of bankruptcies peaked at 26,320 in 1998-09, but there were fewer debt agreements then. Creditors increasingly sought a formal arrangement, rather than accepting a default.
Mr Lowe said 18 per cent of bankruptcies were related to businesses, with most of the people involved blaming trading conditions.
The overwhelming bulk of bankruptcies were individuals who had either suffered a loss of income because of unemployment, or had taken on excessive debt.
"A lot of the activity relates to people with low incomes and relatively small unsecured debt," Mr Lowe said.
More than two-thirds had earned an income of less than $30,000 in the previous 12 months.
Credit cards were the biggest problem, accounting for 37 per cent of the outstanding debt, while personal loans accounted for 21 per cent.
Store cards and car finance each accounted for 13 per cent.
The number of bankruptcies associated with people running their own businesses had increased in line with the number of consumer debt defaults.
Although the numbers were rising, Mr Lowe stressed that it remained a tiny proportion, at just 0.14 per cent of the population.
