Regional Australians on debt-bubble burst, says report
REGIONAL Australians are finding it increasingly difficult to repay their debts compared to 12 months ago, according to a new report from Prushka Fast Debt Recovery.
Of the 600 participants surveyed, the study found 51 per cent of regional small to medium business owners feel consumers are increasingly finding it difficult to make debt repayments than last year.
Regional business owners surveyed cited genuine hardship (49 per cent) as the main reason why consumers are having difficulty paying their debts, followed by the state of economy (28 per cent) and increased cost of living (25 per cent).
Prushka Fast Debt Recovery CEO Roger Mendelson has encouraged people to get their debts under control now and avoid negative credit ratings sooner rather than later.
“While unemployment, interest and inflation rates remain low, they are still feeling the pinch and living beyond their means by comfortably sitting on their debts, however this is a major concern for the future should a recession, or any economic downturn hit,” Mr Mendelson said.
Almost 43.4 per cent of businesses have more than $10,000 in outstanding debt, yet the average value of debts for 76.3 per cent of respondents was under $2000, indicating large debts are typically paid or recovered quickly, while smaller debts are ignored or forgotten.
“As the economy tightens, businesses will need to greatly compress their internal collection processes so the time between work and payment is reduced,” Mr Mendelson said.
“While smaller debts may seem insignificant, they can quickly add up.
“Ignoring just five $200 debts means you are giving away $1000 for free; don’t let that happen.
“Small businesses form an important part of our economy. Keeping debt in check for businesses and personal finances alike should be a top priority to keep a recession at bay.”