Debt stress rising for young Australians

YOUNG Australians and people living in outer city suburbs are showing signs of severe debt stress, according to a new report.

Debt stress rising for young Australians

YOUNG Australians and people living in outer city suburbs are showing signs of severe debt stress, according to a new report from debt agency Dun & Bradstreet.

The research shows that more than half of the debtors referred to debt collectors in the first quarter of this year were under 35. The number of small debts being chased by debt collectors was also on the rise, accounting for over 60 per cent of all referred debt. Telephone bills accounted for almost half of referred debt.

Dun & Bradstreet chief executive Christine Christian said rising interest rates and higher food and petrol costs meant many people were spending more of their income on essential items, and not paying attention to their debts.

“The increase in low-value debts being referred is very worrying. Defaulting on a $400 bill demonstrates that consumers are in very serious trouble or that they don’t fully understand the consequences of missing payments,” said Ms Christian.

The report said that men have higher average debt than women and are less likely to repay their bills.

Defaulting on a bill will stain a credit record for years and will make it difficult for people to get mainstream access to loans or credit cards.

State by state debt

City dwellers from New South Wales saw the value of bad debt rise 40 per cent in the March quarter, to an average of $1200.

In Victoria, the highest value of average bad debt was in the state’s northern suburbs, at around $750, up 7 per cent on the previous quarter.

The eastern suburbs of Western Australia had the state’s highest average debt, at over $700, up 25 per cent on the December quarter. In Queensland, Brisbane city had the highest average debt at around $930, up 45 per cent. In South Australia, the north eastern and southern suburbs reported average bad debts of over $600, which was down on December figures.