There is a danger of some Australians becoming caught in long-term debt as they struggle to cope with their financial obligation in the face of the global financial crisis, according to a new debt study issued by Veda Advantage.
The Australian Debt Study Report, conducted by Galaxy Research for Veda, found that 16 per cent of Australians were having difficulty repaying debts and 21 per cent of those who were likely to apply for credit over the next six months said they were currently having difficulty paying debts.
The research also found that almost 23 per cent of respondents struggling to repay bills now owed more than they did 12 months’ ago.
Commenting on the research, Veda Advantage general manager, market and product development, Russell Evans said while the majority of Australian families were managing credit responsibly and continued to pay down debt obligations, a small but sizeable population of Australians were struggling and therefore creating a debt divide.
He said it was on this basis that urgent action was needed on the part of government to add comprehensive credit reporting to the list of credit reforms.
“Helping lenders prevent these families falling into a debt trap should be a high priority,” Evans said. “But government legislation to allow lenders to see when a borrower is overcommitted is facing continued delays.”
