The study, undertaken by the University of Melbourne's Centre for Corporate Law and Securities Regulation, found that the last 18 years has seen a significant hike in the rate of personal insolvency, including bankruptcy. The 261 per cent rise is attributed to credit factors, gambling and the cost of caring for dependants.

Given that economic times were considered good during most of this period, said the study's author, Professor Ian Ramsay, the growing rates of personal insolvency were increasingly concerning. "Now that we are experiencing very difficult economic times, the rate of personal insolvency is increasing and we can expect to see it grow across more parts of Australian society," Ramsay said.

Personal insolvency was found to be a growing phenomenon across the middle class, with bankrupt individuals increasingly coming from higher status occupations, as well as higher levels of personal and housing incomes.

Ramsay said these finding should challenge some common stereotypes regarding bankrupts - especially the misconception that they tend to be mainly students or the unemployed.

The problem is also growing around older Australians. In 1997, 26.25 per cent of bankrupts were aged 45 or older but in 2008, 45 per cent fitted that age group.

- Angela Priestley