Young adults in Australia are going bankrupt at a record rate.
Explosion-style growth in the availability of credit, online services and buy-and-pay payments has led to the burgeoning debt of young people. Many people do not realize that bankruptcy will leave a permanent bad record and may prevent them from travelling abroad.
A new analysis by the credit agency illion found 784 18-to-24-year-olds went bankrupt in the September quarter, up from 123 four years ago. In most states, the break rate among young people is five times higher than in 2014.
Bly (Simon Bligh), chief executive of Illion, said many young people had little or no significant assets to lose, so they would not actively avoid bankruptcy.
"more people get loans at a young age and sign financially binding contracts for digital subscription services for music, movies, television shows, online shopping and gaming accounts." "but young people have poor financial knowledge," he said. "that's the key factor that makes their debt roll up to the point where they can't afford it."
The analysis found that the 18-to 24-year-old age group was the only age group in which the number of bankrupt women exceeded that of men. In the three months to Sept. 30, 7400 Australians went bankrupt, down 9.5%.
According to Bly, post-bankruptcy restrictions include:
- A written application to the trustee is required before leaving the country.
- When wages exceed a certain amount, they may be forced to pay their debts.
- The name is permanently registered in the National Public Register of individual Insolvency Index.
- In addition, bankruptcy records will be kept in people's credit records for at least five years, affecting their ability to lend.
Patton (Tammy Barton), director of MyBudget, said it was easier than ever to put young people in an uncontrollable state of debt, and that many did not pay attention to the debt situation "until they were bitten."
Bankruptcy could offer a fresh start, she said, but it was just one of many options for dealing with debt.
"most people can actually pay their debts without going bankrupt or borrowing new loans," she said.
"interest-free credit products that can now be purchased and paid in installments are also on the rise and are having a significant impact on young people."
There are pitfalls, too, says Barton, and telecoms companies will soon leave a black mark on people's credit profiles.
(David Rankin), a personal finance expert, said that while young people are well versed in technology, modern financial technology products are actually bad for them.
"five or ten years ago, we didn't have an Afterpay or a digital wallet, we didn't have a cell phone bank, and now all of this is hurting young people." He said。
"they left school and left home, and I don't think they're ready for it because they can't manage their finances yet."
Mr Rankin said bankruptcy should be "the absolute last resort" and that people should first try budgeting with banks and other lenders, turn to their families for help, consult financially and apply for the treatment of needy households.