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The Australian Financial Security Authority has released the personal insolvency activity statistics for the September quarter 2016 – and personal insolvencies are on the rise.
According to the Australian Financial Security Authority, the number of personal insolvencies in the September quarter rose 1.1%. This followed an increase in the June quarter 2016 by 13.6% over the June quarter 2015, with bankruptcies increasing by 7% and debt agreements increasing by more than 24%.
In the September quarter 2016, debt agreements accounted for 44% of total personal insolvencies. This is the highest proportion since debt agreements commenced in 1997.
The raw number of personal insolvencies state by state was as follows for the September quarter:
Source: AFSA September 2016 Quarterly statistics – personal insolvency
Types of insolvencies
The most common type of insolvency in the September 2016 quarter was bankruptcy, closely followed by debt agreements. State by state, the breakdown of figures is as follows:
| Bankruptcies (Parts IV and XI) | Debt agreements (Part IX) | |
|---|---|---|
| State/territory | Sept quarter 2016 | Sept quarter 2016 |
| NSW | 1,185 | 977 |
| ACT | 50 | 55 |
| Vic | 818 | 598 |
| Qld | 1,272 | 993 |
| SA | 267 | 144 |
| NT | 35 | 51 |
| WA | 479 | 415 |
| Tas | 125 | 74 |
| Total | 4,231 | 3,307 |
Source: AFSA September 2016 Quarterly statistics – personal insolvency.
All the above figures refer to personal administrations where a person becomes bankrupt under the Bankruptcy Act, not corporate insolvency where a company goes bankrupt.
What to do if you’re in financial trouble
While bankruptcy is one option, but it is a life-changing decision and seriously affects your credit rating. Instead, there are other paths you can consider if you find yourself in financial trouble, including:
Negotiate with your creditors
It is not in the interest of your creditors for your debt to become unrecoverable – so you may find that most creditors are willing to negotiate new repayment terms, to help make your debts more manageable. Ideally, contact your creditors before your debts get out of control and before they begin chasing you for payment.
Seek help from a financial counselling service
Financial counsellors are a free and independent service offered around Australia. Financial Counsellors can provide information, support and advocacy to people in financial difficulty. Find a counsellor in your area, or phone the debt help line at the Financial Counselling Australia website.
Enter a formal option
Bankruptcy is a formal option, but there are other alternative types of agreements you can enter in to, including interim relief, a debt agreement and a personal insolvency agreement.
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