Why do people go bankrupt? And which professions are more likely to bankrupt.
It may not be who you think...
One of the largest registered bankruptcy Trustees in Australia, Aravanis has mined its data across 2017 and discovered that those with the following professions were more likely to go bankrupt than any other profession*:
- Managers (Sales, Marketing, PR, Business Administration, ICT)
Machine and Stationary Plant Operators- Road and Rail Drivers
- Business, Human Resource and Marketing Professionals
- Health Professionals (Nurses and Midwives)
- Design, Engineering, Science and Transport Professionals
- Construction Trade Workers
- Other Labourers
- ICT Professionals
- Electrotechnology and Telecommunications Trade Workers
It is a commonly held assumption that bankruptcy is caused by over-spending, reckless living and poor saving habits.
However, it is often honest, hardworking people who have fallen on bad luck that may lead to mounting debt, tax debt and severe financial difficulties.
Redundancy, bereavement or a divorce can very suddenly leave people struggling to pay the bills.
In Aravanis’ experience there are actually not many trends that predict this happening.
Tradie or office-worker, male or female, property owners or those renting, employed or self-employed, it doesn’t really seem to make much difference to the likelihood that you’ll end up in financial strife says Andrew Aravanis, Principal Registered Trustee at Aravanis.
“Although it is happening slowly, more and more Australians are realising that bankruptcy is actually a valid choice when faced with overwhelming debt.
“With more information on how to navigate bankruptcy and with the stigma fading away, thousands of Australians are choosing personal insolvency options like bankruptcy to help them to move on from an unmanageable financial situation and a highly stressful emotional position.
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“There are a lot of myths out there regarding bankruptcy.
From wages being garnished, cars and property automatically being sold on the open market to international travel bans and lifetime credit impairment.
“Unfortunately, I find most consumers have a distorted understanding of bankruptcy — usually sourced from backyard experts who know little about the subject but are keen to give others advice.
This kind of misinformation adds an extra layer of difficultly for everyday Australians who need to make financial decisions while in hardship.
“Another issue we’re seeing is that people looking to file for bankruptcy are engaging online providers to help them complete their bankruptcy paperwork for a steep price!
“It’s alarming that so many “experts” charge exorbitant fees for what is ordinarily a relatively straight-forward process.
“Anyone experiencing financial distress should know they can get professional assistance.”
* Figures are not based on all people filing for bankruptcy. Data is based only on Aravanis’ client base.
