THE effects of the global credit crunch are likely to prompt increased levels of corporate and personal bankruptcy in the Port Macquarie area within six months, a local expert fears.

David Leigh, a partner at insolvency firm PPB, said Port Macquarie in general hadn’t yet suffered from the global financial problems.

“There are two chief reasons for that. Firstly, the economy here has a higher level of fixed incomes and, secondly, businesses tend to gear themselves to that market.”

Mr Leigh – who advises clients in danger of, or already in, bankruptcy – said there was a trickledown effect in the economy. Major national and multi-national corporations in the big cities felt the pinch before it filtered through to the small and medium enterprises that dominate regional economies.

“Our own firm’s research – conducted by our head office – indicates that bankruptcies will rise here in the next six months,” he warned.

“Personal inquiries have picked up by 20 to 25 per cent across the country, and that wouldn’t be out of step with the Port Macquarie area.

“Confidence has been hit hard. The consumer has put his hand in his pocket and kept it there. People are not spending on the luxuries that they were before.”

Mr Leigh said the lack of confidence had been particularly acute in the “bellweather” sectors of real estate and construction.

“Confidence and insolvency are very much linked,” he said. “When confidence is low, money stops circulating and that hits businesses, leading to more insolvencies.”

Mr Leigh, whose firm acts as trustees for personal bankruptees, and as receivers and administrators for commercial bankruptcy cases in the Port Macquarie area, said no one could afford to bury their head in the sand if financial difficulties loomed.

“My best advice is not to ignore it and hope the problems go away,” he said.

“You have to keep pro-active if you think you might be in trouble.

“Seek professional advice, once the warning signs appear.

“Things rarely get better if you don’t confront them early.”