Bankruptcies drop to five-year low

With the use of credit cards declining as Aussies tighten their purse strings and take more care with their finances, the number of bankruptcies in the country has fallen to a five-year low.

The Inspector-General in Bankruptcies annual report for 2010/11 revealed that there were only 23,102 new bankruptcies this year, which was a 16 per cent decline on the preceding 12-month period.

Unemployment was the main reason given by those declaring bankruptcy, although there was still a decline of one percentage point in the number of people citing this cause.

Veronique Ingram, inspector-general, observed that there was a two percentage point decline in the number of people citing "excessive credit use" as the reason.

Despite the apparent increase in caution regarding credit card use by Aussies, data published by Westpac earlier this month revealed that in August there was a 0.2 per cent month-on-month increase in private sector credit.

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