The most recent personal insolvency statistics have been published by the Australian Financial Security Authority (AFSA, formerly known as the Insolvency and Trustee Service Australia).
The data shows that compared to a year ago, personal insolvencies increased 13.7% for the June quarter. And compared to the March quarter this year there was a 10.7% increase.
AFSA says these were divided by type into bankruptcies (which increased by 7%) and debt agreements (up by 24.3%).
AFSA says this is the fifth consecutive rise when compared to the same quarter a year ago, and is the largest rise since the March quarter of 2009, which recorded a 17.9% jump.
Most of the increase in personal insolvency was accounted for by activity in Western Australia (up 36.4% in state terms) and Queensland (14.8%), but debt agreements over the same period (whereby creditors agree to accept a sum of money that the debtor can afford) were the highest on record.
The jurisdiction that dominated in this category was the ACT, which saw an increase of 38.1% in debt agreements. At the same time however (perhaps evidence of their negotiating skills), residents of our national capital enjoyed a 21.4% drop in actual bankruptcies over the year to June.
Of the personal insolvencies, AFSA says 17.5% were in some way related to an individual’s own business activity. The most common cause attributed to this result was “economic conditions”, and the most nominated cause for personal bankruptcy was “loss of income”, mostly from unemployment but also from excessive use of credit.
# [bankrupt], [credit rating], [debt], [debt management], [insolvency]
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