Bankruptcy woe: City of broken dreams

By John Van Klaveren
GEELONG suffers the greatest financial stress in the state, according to new bankruptcy and debtor figures.
The region registered 266 bankruptcies for the past financial year, the highest of any region in Victoria.
Insolvency and Trustee Service Australia revealed the bankruptcy figures in its first postcode-based report.
The figures showed the 3216 postcode, covering the middle-class suburbs of Belmont, Highton, Waurn Ponds and Wandana Heights, had the highest level of bankruptcies at 54.
The Corio-Norlane area had 46, with the 3219 postcode of East Geelong and Whittington was next on 33.
Rene Ploegmakers, a financial counsellor with community services organisation Diversitat, said the agency was dealing with six new enquiries a day.
“That’s a reasonably high number for an agency this size in a regional area,” he said.
Mr Ploegmakers was not surprised about the higher rate of bankruptcy in the 3216 postcode.
Areas of high population growth with new mortgages also attracted higher rates of bankruptcy and indebtedness, he said.
“People in higher income brackets have more to lose, so bankruptcy becomes the only option left.
“Most people want to pay their debts but also have to meet their essentials.”
Debt collection agency Prushka said Geelong debtors were also “doing it tough”.
Mortgage stress and concern about the potential closure of Alcoa and Ford was prompting many Geelong consumers to defer paying debts, the agency said.
Prushka Geelong account controller Lorraine Ryan said residents of new mortgage belts often “overextended”.
The level of debt had a flow-on affect to small businesses, increasing the risk of voluntary liquidation, she said.
“A small business cannot sustain debts of thousands of dollars and business owners are then forced to sell their house to cover the shortfall.”
Ms Ryan said debtors in the 3214 postcode had often lived with debt and used payment plans to manage their finances.