North Coast bankruptcy 'revalued'
THE number of North Coast residents finding themselves in financial distress is growing, but fewer will be bankrupted if the Federal Government adopts a proposal to raise the bankruptcy threshold.
Federal Attorney General Robert McClelland this week supported a reform to raise the threshold a creditor could bankrupt a debtor from $2000 to $10,000.
Manager of Lismore District Financial Counselling, Steve Snelgrove, said the change was overdue and meant debt collectors could no longer threaten people with bankruptcy and loss of their home because they owed a couple of thousand dollars.
“That's something that we are beginning to see in our work that we hadn't seen before,” he said.
Mr Snelgrove said about 500 people in strife approach his service each year and about a third of these expect to be declared bankrupt.
He said the number of local people getting into trouble had increased since the financial downturn.
“On average eight new clients come to our service every week, this month about 12 are arriving each week,” he said.
The number of debt collectors pursuing North Coast residents is also increasing.
Mr Snelgrove said if clients have a house or other substantial assets, they are more likely to be threatened with bankruptcy than those without assets.
“The debt collectors we come into contact with are not based in this town. They are working for big agencies,” he said.
“We are talking about any company with a state-wide base - they tend to use a debt collecting agency and those agencies are based in cities.”