The number of personal insolvencies fell by over 28% in the period July to December 2024. If that trend continues, the number of personal insolvencies in 2024-2025 may be well under 10,000, compared with 11,644 in 2023-2024.
The drop in numbers was from 1157 in July 2024 to only 828 in December 2024, a fall of 28.44%, with a total for the six months of 6,093.
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From the 1157 in July 2024, there were 1119 in August, 1025 in September, 1009 in October, 955 in November, with the biggest fall, to 828 in December 2024.
Of these new personal insolvencies, around 60 % (493) were bankruptcies, 37% (310) were debt agreements, 24 were personal insolvency agreements, and one was an insolvent deceased estate.
The debtors’ most common industries were construction, health care and social assistance and retail.
Upwards of 50% of bankrupts and Part X debtors were involved in a business, as sole traders, people in partnerships or directors in companies.
Forecast
In 2023-24, there were 11,644 new personal insolvencies.
AFSA has forecast the number to rise by 15% to 13,400 in 2024–25 and by a further 12% to 14,950 in 2025–26.
The 6,093 for the July-December 2024 period represents a fall over that period of over 28%. While a variety of factors may be at play, a continuation of that 28% fall during January-June 2025 would see insolvency numbers come in at about 3,660, making a total for the financial year of under 10,000. See graph.
Small business
As to those large group of individuals whose small business may have failed, there is no Part 5.3B small business restructuring (SBR) for them – their insolvency prospects are a 3 to 8 year bankruptcy or an 18 month or so Part X.
Hence, apart from improved economic conditions, unreformed bankruptcy law may be another reason for the decline in personal insolvencies.
* Graph and analysis prepared by JEM J.D. | M. Eng (Biomed) | B. Eng (First Class Honours)
