Thirty five people a day are going broke in NSW, with figures showing a rising number of Western Sydney families losing their homes to creditors.
The volatile combination of interest rates, rising food and petrol prices is forcing people to declare themselves bankrupt.
Research commissioned by the Insolvency and Trustee Service for the State Opposition shows a 10.3 per cent increase in people in Sydney becoming insolvent and a 6.3 per cent rise in other parts of the state.
Sydney’s west accounts for 40 per cent of all bankruptcies, but even wealthier areas are feeling the pinch with the northwest, inner east and North Shore showing some of the biggest increases in numbers of families going broke.
The high numbers are causing major problems for financial counselling services, who are unable to deal with demand. One charity said “draconian laws” encouraged people to go bankrupt.
Commuter suburbs where workers are spending vast amount of money on petrol are among the hardest hit.
Campbelltown was the hardest hit suburb with 301 people declaring bankruptcy in the past 12 months, Mount Druitt came in second and Liverpool, Prospect and Greystanes made up the top five.
Households in affluent suburbs such as Drummoyne, St Ives, Manly and Beecroft are also collapsing under financial pressure – those areas were in the top 20 Sydney suburbs which reported the biggest jump in insolvencies.
Another growing problem is “sexually transmitted debt”, that being property settlement and credit card debt that is not properly dealt with after a relationship breakdown. With the strains of debt increasing, the emotional stress this causes is unsurprisingly leading to greater pressures on relationships.