New Zealand bankruptcies drop to a five-year low

Media release
22 February 2018
New Zealand bankruptcies drop to a five-year low

• New Zealand bankruptcies drop to five-year low, falling 15% year on year in 2017
• New Zealand's bankruptcy rate is approximately half that of Australia's (relative to population size)
• Last year Auckland had more than twice as many bankruptcies than anywhere else in the country

When it comes to managing our money, and staying out of financial trouble, Kiwis are beating the Aussies hands down, according to new analysis from CreditSimple.co.nz*.

The number of people declaring bankruptcy has reached a five-year-low, dropping by 15% last year compared to 2016.

And if that isn’t enough cause for celebration, we have approximately half the number of bankruptcies, per capita, compared with our friends across the ditch.

CreditSimple.co.nz spokesperson Hazel Phillips said the five-year bankruptcy low is a positive sign for the New Zealand economy. However, with the change of government and housing prices continuing to rise, Kiwis need to continue making conscious budgeting decisions.

“Our economy has been steadily rising over the past few years, which helps create jobs, boost personal finances and bring bankruptcy levels down. The outlook is still good, but there are a number of changes that people should bear in mind: this year we have a new government, new legislations being passed and it’s difficult to predict what will happen to our economy.

“It’s crucial that Kiwis continue to budget and ensure they have an emergency fund to fall back on if personal circumstances suddenly change,” Ms Phillips said.

“Having a cushion of money to draw on if you lose your job or enter a tough spot financially means not having to rely on high-interest sources of credit, which can sting you more in the long term.”

Aucklanders need to be particularly careful, with more than double the number of bankruptcies than anywhere else in the country, followed by Christchurch, Hamilton, Napier and Lower Hutt.

Ms Phillips said Kiwis need to be realistic about what they can afford when getting a loan or mortgage and create a repayment plan from day one.

“If you begin to struggle and ignore your bills, it can significantly damage your credit score and can often be the start of falling into bad financial habits.

“There are free budgeting services available in New Zealand that can put you back on track and help you get out of the debt cycle. Asking for advice and getting budgeting help can make all the difference.”

Kiwis can check if their credit health is in shape by getting their credit score for free at www.creditsimple.co.nz.

If you need financial advice, the National Building Financial Capability Trust (NBFCCT) can put you in touch with free budget advice services wherever you are in New Zealand.

Yearly breakdown of the total number of bankruptcies across New Zealand

Ends
*Drawn from data held by illion, formerly Dun & Bradstreet, CreditSimple.co.nz’s parent company.

ends

© Scoop Media