Bankruptcy levels climbing, figures show

With ease of credit avalibility in competitive financial that uncontrolable spending habits, which lead to the increase of personal bankruptcy.

Bankruptcy levels are climbing with new figures showing a surge in the number of people in financial difficulty.

The latest Insolvency and Trustee Service Australia figures showed there were 22,300 bankruptcies in 2005-06, an 8.9 per cent increase over the number recorded the previous year.

It's the highest number since 2002-03 when 22,639 people sued for bankruptcy.

While absolute bankruptcies are on the climb, the number of small debtors running into problems is also increasing.

There were 4,866 debt agreements - where people with debts under $70,000 can make arrangements with their creditors - during the year, an increase of 2.7 per cent.

These arrangements are mainly used by young people or those earning less than $50,000 a year.

Over the full year, there were 173 personal insolvency agreements, a fall of 16.4 per cent on the 207 recorded in 2004-05.

NSW continues to be the bankruptcy capital, with 1,905 recorded there in the April-June period, an 11.4 per cent increase over the same period last year.

Queensland recorded 1,389 bankruptcies, followed by Victoria (1,284). However, they fell sharply in Western Australia to 350 for the period.

Queensland leads the country in debt agreements, with 472 (an increase of 24.2 per cent) recorded during the April-June period.