Proportions of bankruptcies – a factor of 8.8 in Australia, but only 3.4 in England and Wales

While waiting to see if Australia’s parliament decides to introduce a one year period of bankruptcy, down from the current three, a meander through some personal insolvency statistics from England and Wales (EW; Scotland and Northern Ireland report separately) shows quite different figures and proportions from the numbers in Australia.

This very loose extraction of some figures and their analysis is mine alone but is based on reliable figures.

EW introduced a one-year period of bankruptcy in 2002.  (This caused what became known as ‘bankruptcy tourism’ whereby debtors in other countries with longer periods of time applied to go bankrupt in EW, claiming they were in fact settled there: see for example Re Muldoon (Petitioning Debtor) [2016] NIMaster 5. But that is another story).

In EW, bankruptcies have fallen in number considerably from over 75,000 per annum, in 2009, to under 20,000 in 2017. This fall seems to have been made up for by Individual Voluntary Arrangements (IVAs) and Debt Relief Orders (DROs), being alternatives to bankruptcy, both of which have increased significantly in the past 10 years, particularly DROs which came into law in 2009.

The respective proportions used by EW debtors are:

  • 60% – IVA;
  • 25% – DRO; and
  • 15% bankruptcy.

In Australia, the proportions are:

  • 47% debt agreements
  • 54% bankruptcies

Putting this in perspective:

  • England and Wales, with populations of around 60 million, have upwards of 20,000 bankruptcies annually.
  • Australia, population 25 million, has about 16,000 annually.

That is, the rate of bankruptcies in Australia is 8.8 per 10,000 adults, the rate in EW is 3.4.

But EW has a higher rate of personal insolvencies overall – 23.2 per 10,000 adults in England and Wales compared with 16.7 per 10,000 adults in Australia.

Not only that. In EW, voluntary bankruptcies totalled about 12,000 in the last year (63%), while court ordered bankruptcies totalled 7,400 – 37%. In Australia, court ordered bankruptcies comprise only 10%.


These figures and the comparisons bear further and closer analysis. Overall, the EW figures show that a more tailored series of options for debtors, depending on their circumstances, should be available, with bankruptcy itself being a more particular and perhaps lesser option.

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