Personal insolvency numbers – an increase or a decrease?

While AFSA reports that personal insolvencies increased in number in February 2023, to 796, from 772 in January, this was hardly significant – in fact, more a decrease – given the usual low numbers over the December-January period.  Monthly personal insolvency statistics | Australian Financial Security Authority (

In context, there were 1,614 personal insolvencies in February 2020, and 2,736 in July 2019.  The continued low numbers may indicate an on-going trend away from the strictures of bankruptcy law and its long period of containment.  The March 2023 figures will be interesting.

Most personal insolvencies involve relatively small debt.  As AFSA has recently reported, 52.7% of those who entered into a personal insolvency during 2021–22 had under $50,000 in liabilities – hardly worth going bankrupt over – and 25.2% had debts totaling over $100,000.

Bankruptcy and its restrictions has more severe consequences for those in small business.  In February 2023, over a third of debtors were involved in a business. The average debt for a business-related personal insolvency is $830,502 – over 5.8 times larger than a non-business-related personal insolvency ($141,733).  Construction and retail businesses featured in the numbers. 

While no-one would want to see personal insolvency numbers increase, its relevance may be qualified by its unreformed state.  As to ideas for reform, the Attorney-General’s department is considering the outcomes from the roundtable discussion of 2 March 2023 with a view to briefing the Attorney on potential reforms.  Broader reforms may be needed, in particular for small business, in the nature of the more fundamental issues being raised by the parliamentary joint committee inquiry into corporate insolvency, due to report by 30 May 2023: Attorney-General’s Roundtable on Personal Insolvency – Murrays Legal

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