By Lev Bromberg (The University of Melbourne), Ian Ramsay (Melbourne Law School – University of Melbourne), Paul Ali (University of Melbourne – Law School; Centre for International Finance and Regulation (CIFR))

This article presents the results of the first empirical study focused on older Australians in bankruptcy. Our study — based on the examination of a large and unique dataset obtained by the authors from the bankruptcy regulator — provides a valuable insight into the severe financial challenges faced by many older Australians. Our analysis provides insights into the most significant causes of bankruptcy for older Australians as well as some possible explanations for their financial vulnerability. Our findings include that older Australians comprise an increasing proportion of those in bankruptcy and they are far more likely to cite excessive credit as the cause of their bankruptcy compared to younger and middle-aged bankrupts. We also find that the key salient features of older Australians in bankruptcy are their very high credit card debts, particularly in light of their low incomes and modest levels of assets. While older Australians tend to own real estate (such as their own home) and can be described as being ‘asset rich’, we observe that only a very small proportion of older Australians in bankruptcy own real estate.

Source: SSRN