Fewer Australians went bankrupt in the December quarter as more people under financial stress entered debt agreements.
Figures released by the Australian Financial Security Authority on Friday showed that in the three months to the end of December, 2014 personal bankruptcies fell 13.7 per cent to 4,179, from 4,844 one year earlier.
There were falls in all states and territories except Western Australia.
The number of people entering debt agreements rose 2.5 per cent to 2,655, up from 2,589 in the prior corresponding period.
Financial Counselling Australia executive director Fiona Guthrie said the trend over the last few years had been for bankruptcies to fall and debt agreements to increase.
"One can only put that down to more conservatism from Australians around taking on debt," Ms Guthrie said.
In a tough economic environment, people were paying off debts and credit card balances.
Ms Guthrie said debt agreements continued to increase as private companies advertised the service.
The companies charge fees to manage a person's insolvency.
Ms Guthrie said that entering a debt agreement could be a good option for people some people if they had assets to protect.
The debt agreement meant that a person would pay back some of their debt while keeping enough money to pay off a secured asset such as a house.
Yet if a person had no assets to protect, entering a debt agreement provided little benefit because the impact on one's credit record was the same as bankruptcy.
Ms Guthrie said that if a person did not comply with a debt agreement, a creditor could move easily have the debtor declared bankrupt.
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