Recent data published by The Australian Financial Security Authority, suggests that total personal insolvencies in the March quarter of 2017, saw a 10.8% increase compared to that of last year. The 7,900 new personal insolvencies ranged from all categories including bankruptcies, debt agreements and personal insolvency agreements. Compared to the March quarter 2016 (7,129). The March quarter 2017 is the eighth consecutive quarter in which total personal insolvencies have risen year-on-year.
All states and territories across Australia contributed to this rise with Western Australia reaching a record high. A total of 928 personal insolvencies by Western Australia translated to a 26.9% year on year increase from 2016 (more than 195 extra insolvencies). On the other hand, the Australian Capital Territory say the largest proportional increase in personal insolvency with 32.6%.
By type of personal insolvency:
Bankruptcies
The number of bankruptcies in the March Quarter increased by a total of 2.5% which is an increase of 6.3% from the December quarter. The Australian Capital Territory had the highest increase in bankruptcies of 41.5%, followed by Northern Territory and Western Australia with 30% and 14.9%. Two states that saw a slight decrease in bankruptcies were New South Wales with -1.9% and Victoria -.05%.
Debt Agreements
Debt Agreements saw a 20.8% increase in this quarter compared to last year’s March 2016 quarter. South Australia took the lead with a 41.7% increase from last year. Western Australia, Tasmania and Northern Territory also followed with a proportional increase of 39.1%, 35.7% and 25%. It also increased in all other states and territories. This rise marks the seventh consecutive year on year rise of debt agreements.
Personal Insolvency Agreements
It is important to note that personal insolvency agreements fluctuate a lot more than bankruptcies and debt agreements are their levels are proportionally and relatively smaller. The number of personal insolvency agreements increased by 91 in the 2017 March quarter, equating to a 139.5% increase from last year. Western Australia topped the increase in personal insolvency agreement at a whopping 240%. Northern Territory, Victoria and New South Wales followed suit with a 200%, 162.5% and 100% increase. This marks the third consecutive year-on-year rise of personal insolvency agreements.
Causes:
Economic Conditions – Economic conditions was the most common cause of personal insolvency in business related debt situations. This equates to around 392 of Australia’s debtors. Notably, 16.5% of debtors entered a business related personal insolvency in the March Quarter of 2017.
Excessive Use of Credit – Excessive use of credit was noted as the most common cause for non-business related debt situations. This cause related to more than 2,385 Australian debtors.
If you are looking at applying for a personal insolvency or have any debt-related inquires, we recommended you speak to a debt professional before undertaking any agreement. Call Debt Fix on 1300 332 834 or to speak with an expert and find out your options concerning the type of debt you owe. Visit our website on https://www.debtfix.com.au/debt-agreement-advantages-disadvantages for more in-depth information of debt agreements.