Plastic has families falling short
FLASHING the plastic to keep up with the Joneses has landed some Central Queensland families with massive debts.
The shocking truth is revealed in figures from a debt consolidation company which has produced an average figure for Queensland postcode areas of how much debt people are in before they seek help.
The data, from Debt Mediators, shows residents in Emerald have the highest levels of average personal debt in the region with $44,730 owed in unsecured loans.
Mortgages and bank loans for cars are excluded from the figures which show people in Mackay are the most likely to get into financial difficulty and North Rockhampton residents have the highest average personal debt in the city with $31,997.
South of the river the debt is considerably lower at $22,246.
Ben Paris, debt counsellor with Debt Mediators, said the company received more than 10,000 calls each year from Queenslanders who were experiencing difficulty in repaying their unsecured loans.
“Generally the situation is they’ve been spending a little bit more than they can afford, about 5% a year for a number of years, and something will happen. There’ll be a large unexpected expense, so it might be the car blows up or there’s little reductions in overtime, which might be why Mackay has been so busy in the last 12 months. And all the wheels fall off the cart.”
“It’s just credit card debt. Generally it’ll be putting everyday expenses on the credit card for a number of years and it builds up.”
He said it was a symptom of the credit based lifestyle, with even some of our biggest earners falling into the trap.
“Debt is generally distributed proportionately to income, so for me, it would mean there’s some high income earners (in the region). That’s why people would offer them more debt.
“Everyone’s trying to keep up with the Joneses, but chances are the Joneses paid with a credit card as well.”
He said he was surprised at the level of debt in Rockhampton although the Central Queensland average, $32,000, is less than the average for the state.
“It is surprising the number of people in regional Queensland, particularly up north, who are in debt. I really didn’t think it would be that high.”
But it was Mackay especially that was over-represented in the statistics of people falling into trouble.
“It’s not just that there’s large numbers coming from there, they’re about 5% more likely to be in debt.
“Even though you’ve got big money, lots of mining income, it seems to be going towards servicing debt rather than putting aside for the future.
“To be in the top three in the state is pretty incredible. The only place it’s getting beaten by is Bundaberg and Toowoomba. Getting that high is not something residents of Mackay should be too proud of.”
Mr Paris said debt consolidators helped people get their debts under control.
“They don’t go bankrupt. That doesn’t really help either party. The banks don’t get any of their money, and the client’s bankrupt. We’ll go through a budget with the client and work out what they can actually afford so, then we’ll just make an offer to the creditors. We’re trying for a win-win.”
The figures represent people who have fallen at least one month behind in their repayments and who have contacted Debt Mediators for assistance.