In 2000-01, the major cause of business bankruptcy was stated to be economic conditions, 41% of cases. This was followed by a lack of capital, 17% of cases, and lack of business ability, 15% of cases. This compares to 1999-2000, in which lack of business ability, with 33%, was stated as the most common cause of bankruptcies, followed by lack of capital, 23% of cases, and economic conditions, 22% of cases.
In terms of non-business bankruptcies, excessive use of credit was stated as the most common cause of bankruptcy in 2000-01, with 50% of cases, followed by unemployment, 31% of cases. This compares to 1999-2000 in which unemployment was stated to be the cause in 57% of cases and excessive use of credit the cause in 30% in cases.
The turnaround in causes of bankruptcy from 1999-2000 to 2000-01 can be partly attributed to Insolvency and Trustee Services Australia (ITSA) adopting a new method of collating information on the causes of bankruptcy. In 2000-01, debtors were given a list of causes to chose from as opposed to 1999-2000 where debtors note a description that was then interpreted by ITSA staff.
CAUSES OF BANKRUPTCY, Tasmania
|
 | | 1999-2000 | | | 2000-01 |
|
| |
|
| Cause(a) | no. | % | | no. | % |
|
| Business | | | | | |
| Economic conditions | 26 | 22 | | 47 | 41 |
| Lack of business ability | 39 | 33 | | 17 | 15 |
| Lack of capital | 27 | 23 | | 20 | 17 |
| Excessive interest | 2 | 2 | | 8 | 7 |
| Excessive drawings | 5 | 4 | | 9 | 8 |
| Inability to collect debts | 5 | 4 | | 1 | 1 |
| Failure to keep proper books | - | - | | 1 | 1 |
| Seasonal conditions | 2 | 2 | | 2 | 2 |
| Gambling or speculation | 2 | 2 | | 1 | 1 |
| Personal reasons | 11 | 9 | | 4 | 3 |
| Other causes not stated | - | - | | 6 | 5 |
| Total(b) | 119 | 100 | | 116 | 100 |
| | | | | |
| Non-business | | | | | |
| Unemployment | 451 | 57 | | 276 | 31 |
| Domestic discord | 25 | 3 | | 76 | 9 |
| Excessive use of credit | 237 | 30 | | 443 | 50 |
| Ill health | 24 | 3 | | 35 | 4 |
| Adverse litigation | 29 | 4 | | 42 | 5 |
| Gambling or speculation | 11 | 1 | | 6 | 1 |
| Liabilities on guarantees | 16 | 2 | | 11 | 1 |
| Other causes not stated | 1 | - | | 4 | - |
| Total(b) | 794 | 100 | | 893 | 100 |
- nil or rounded to zero
(a) In 1999-2000 causes were determined by debtors writing a description that was then interpreted by ITSA staff. In 2000-01, causes were chosen by debtors from a predetermined list.
(b) Respondents may have recorded more than one cause.
Source: Inspector-General in Bankruptcy, Annual Report on the Operation of the Bankruptcy Act, 2000-01 (available at the ITSA web site, http://www.itsa.gov.au) |
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