Bankruptcies in Australia are at their lowest rate in almost 20 years, with the number of bankruptcies declining by 10.90% in 2013–14 (18,601) compared to 2012–13 (20,876). This is the lowest number of bankruptcies recorded in the financial year since 1995–96.
The number of bankruptcies fell in all states and territories in 2013–14 compared to 2012–13:
| State | 2013–2014 | 2012–2013 | % Change |
|---|---|---|---|
| NSW | 6,098 | 6,799 | -10.31% |
| VIC | 3,854 | 4,180 | -7.80% |
| QLD | 5,356 | 6,052 | -11.50% |
Total Personal Insolvency levels in Australia are at their lowest annual level since 2005-2006 financial year, according to the latest report released from the Australian Financial Security Authority (AFSA). Personal Insolvency activity fell by 4.24% in 2013 – 2014 (29,514), in comparison to 2012–13 (30,822).
Key findings for Total Personal insolvency activity in 2013–14
- Personal insolvency agreement activity in 2012–13 is at the lowest level in a financial year since 2005–06.
- Bankruptcies fell in all states and territories in 2013–14 compared to 2012–13. Bankruptcies are at their lowest annual level since 1995–96.
- Debt agreement activity in 2013–14 reached the highest level on record in a financial year. The previous record occurred in 2012–13.
- Total personal insolvency activity fell 4.24% in 2013–14 compared to 2012–13.
Total Personal Insolvency – Year End 2013-2014
The decline in total personal insolvency activity in 2013–14 was the result of decreases in total personal insolvency activity in all states except Western Australia. There was a total of 29,514 personal insolvencies recorded in total across Australia in the 2013 – 2014 financial year, down by 4.24% from 2012 – 2013 (30,822).
| State | 2013-2014 | 2012-2013 | % Change |
|---|---|---|---|
| NSW | 9,708 | 10,122 | -4.09% |
| VIC | 5,979 | 6,105 | -2.06% |
| QLD | 8,471 | 8,812 | -3.87% |
Debt agreements
Debt agreement activity reached the highest annual figure on record in 2013–14. There were 10,705 debt agreements in 2013–14, an increase of 10.91% from 9,652 debt agreements in 2012–13. The increase in debt agreements shows that individuals are more aware of the signs of financial difficulties, and are opting to enter into a debt agreement as a preventative measure to avoid entering into bankruptcy, which should be used as a last resort.
Debt agreements now make up 36.27% of total personal insolvency, an increase from 2012–13 (31.32%).
| State | 2013 – 2014 | 2012 – 2013 | % Change |
|---|---|---|---|
| NSW | 3,556 | 3,235 | 9.92% |
| VIC | 2,060 | 1,846 | 11.59% |
| QLD | 3,067 | 2,706 | 13.34% |
Personal Insolvency Agreements
Personal insolvency agreement activity shows higher volatility than bankruptcies and debt agreements due to the smaller numbers recorded each year.
Personal insolvency agreements comprised 0.70% of total personal insolvency activity in 2013–14, a fall from 0.95% in 2012–13.
The number of personal insolvency agreements fell 29.25% in 2013–14 (208) compared to 2012–13 (294).
| State | 2013 – 2014 | 2012 -2013 | % Change |
|---|---|---|---|
| NSW | 54 | 88 | -38.64% |
| VIC | 65 | 79 | -17.72% |
| QLD | 48 | 54 | -11.11% |
June Quarter 2014 sees a 9.04% fall in Personal Insolvency, the lowest level since June Quarter 1995
The total Personal Insolvency activity in Australia has seen a 9.04% fall in the June Quarter 2014 (6,884), in comparison to the same June quarter in 2013 (7,568), according to the latest report released from the Australian Financial Security Authority (AFSA). Personal Insolvency activity in June Quarter 2014 decreased in comparison with the March Quarter 2014 by 10.07%.
| State | June Quarter 2014 | June Quarter 2013 | % Change |
|---|---|---|---|
| NSW | 2,217 | 2,439 | -9.10% |
| VIC | 1,366 | 1,542 | -11.41% |
| QLD | 2,031 | 2,148 | -5.45% |
In summary:
- Bankruptcies in the June quarter 2014 reached the lowest level since the June quarter 1995.
- Bankruptcies fell 25.14% in the June quarter 2014, compared to the June quarter 2013.
- The number of debt agreements in the June quarter 2014 is the highest number on record in a quarter. The previous record for a quarter was in the March quarter 2014.
- Debt agreements in the June quarter 2014 (2,979) rose by 27.09% from June quarter 2013 (2,344)
- Personal Insolvency agreements in the June quarter 2014 (48) fell by 33.33% in comparison to June 2013 quarter (72).
- The rise in debt agreements did not offset falls in bankruptcies and personal insolvency agreements. As a result, total personal insolvency activity fell 9.04% in the June quarter 2014 (6884) compared to the June quarter 2013 (7,568).
Causes of Personal Insolvency
The decrease in personal insolvency is due to economic conditions where the personal insolvency was business related (432 debtors), and unemployment, where the personal insolvency was non-business related or it was not stated whether the insolvency was business related (1 854 debtors).
Locations
Total personal insolvency activity fell in all states and territories except Western Australia and the Northern Territory in the June quarter 2014, compared to the June quarter 2013.
Debt agreements in New South Wales, Australian Capital Territory, Queensland and Western Australia in the June quarter 2014 are the highest number on record in a quarter.
If you would like more advice on how SV Partners can assist your clients with personal insolvency matters, please contact one of our expert advisors on 1800 246 801.
Further information and statistics, including all national results, are also available via the AFSA website.