Written by David Iannuzzi in March, 2007

The Insolvency & Trustee Service Australia (ITSA) held its 6th annual congress in July last year. Updated figures were discussed relating to the current trend of bankruptcies. Over 30,000 people became bankrupt in the last financial year. Of these, New South Wales had the highest.

Bankruptcies are generally classified as either business or non-business related. Non-business bankruptcies are usually a result of non employment combined with excessive use of credit.

If we take a closer look at business related bankruptcies, the main causes outlined at ITSA’s congress showed economic conditions as the primary reason, followed by personal reasons, lack of capital, lack of business ability and excessive interest and drawings. Other failures included inability to collect debts, gambling, poor bookkeeping and other causes not stated. Add to these factors the rapid growth of Internet trading, and a new breed of bankruptcies may soon be approaching in the not too distant future.

To obtain an indication of your personal or business’ current financial status, contact our office to arrange for a comprehensive and cost effective business health check. By utilizing this service, your business may well have an opportunity to turnaround.