Bad Debt becomes an Australian Epidemic

BAD debt has become an epidemic in Australia, according to Australian Mortgage Options managing director, Robert Projeski.

Spiralling costs for the average household means many people were struggling to live within their means.

Robert Projeski said that he had seen the level of bad debt grow from a concern among isolated sections of society to an epidemic.

"Getting into debt is easy" he said." Being able to control debt is the hard part. It is extremely common for individuals to be juggling as many as two personal loans and three credit cards at the same time. Sooner rather than later it is simply too much to cover, especially if you already have a mortgage."

He said wages could only stretch so far and it could be difficult to avoid being susceptible to bad debt, particularly with petrol prices and rising interest rates eating into the weekly budget.

Debt consolidation was not only a viable option to ease the strain of bad debt, but was essential in many cases.

"One option for people in this position is to see their financial institution and consolidate their debt into one loan because the savings each month can be significant" he said.

"To illustrate the effectiveness of debt consolidation, an average mortgage with debts of $304,437 from a home loan, two personal loans and three credit cards could accrue monthly repayments totalling an imposing $3537. By consolidating their outstanding debt into one loan of $342,000, they would save $1556 a month in repayments with additional cash of $34,750 for a range of other purchases, from value-adding home renovations to share market investment."

By Robert Projeski, Managing director
AMO (Australian Mortgage Options)

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