The number of people failing to pay their bills rose nearly 18 per cent in the first nine months of 2010, compared to a year earlier, credit bureau Veda Advantage says.
Veda managing director John Roberts said tens of thousands of people were finding they could not pay their bills,
were going into arrears and then finding their credit record was affected.
Defaults stayed on credit reports for five years and would have a huge negative impact for anyone trying to obtain credit during that time, Roberts said today.
At the same time 336,716 companies had outstanding debt, representing about half the country's trading companies.
The most concerning aspect was that $12.2m of that debt was overdue by 90-120 days.
"At this point these debts are likely to be written-off, which will have a severe impact on creditors and ultimately serve as a further negative impact on business, business returns and the wider economy," Roberts said.
Providers of goods and services list unpaid or overdue bills with Veda Advantage when individuals or companies have failed to pay after 30 days.
Consumer resistance to credit cards continued with applications for the nine months to September 2010 down 13.53 percent on the same period last year. Applications last month were down 21.55 percent compared with September 2009.
A fundamental shift was undoubtedly under way in the economy with consumers exercising caution and opting to save, Roberts said.
- NZPA
