Bankruptcy soars as city feasts on easy credit
Sydney has overindulged on a wave of easy credit causing bankruptcies to soar, according to new figures from the federal insolvency watchdog.
The bankruptcy figures give an insight into the widening chasm in a two-speed Sydney. Outer-ring areas such as Wollondilly and Holroyd have bankruptcy rates up to six times the national average, while in inner areas such as Ku-ring-gai, Mosman and Manly it is under half the national average.
Consumer advocates have warned of unscrupulous tactics adopted by some lenders. In an unpublished report to the Australian Securities and Investments Commission, the Sydney-based Consumer Credit Legal Centre surveyed 14 borrowers who successfully refinanced home loans despite facing extreme financial difficulty.
Last month, the Australian Prudential Regulation Authority reported one in four loans were being written by banks requiring repayments of at least 30 per cent of gross income – the definition of mortgage stress. Census figures show one-third of NSW homeowners are in mortgage stress.
This is a growing concern around Australia. Is the government doing enough to combat this problem? Have your say right here!
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