Last month the Australian Financial Security Authority (AFSA) released the personal insolvency activity statistics for the December 2013 quarter.
Unlike previous quarters it looks like personal insolvency activity on the whole is starting to increase when compared to last quarter with Debt Agreements and Personal Insolvency Agreements leading the way. According to the commentary released by Australian Financial Security Authority (AFSA); “The number of debt agreements in the December quarter 2013 is the highest number on record in a quarter. The proportion of debtors entering a business related debt agreement in the December quarter 2013 is the highest proportion recorded since the March quarter 2003.”
An analysis of these statistics for the December 2013 quarter when compared to that of the September 2013 quarter shows:
- Total personal insolvency activity increased by .15%
- All states except ACT had a decrease in total personal insolvency activity
- Bankruptcy decreased 2.5%
- Personal insolvency agreements increased by 9.09%
- Debt agreements increased by 5.29%
The above figures continue to show a trend of a declining number of bankruptcies yet an increased number of debt agreements and personal insolvency agreements. In our view this shows that debtors are continuing to look for options to avoid bankruptcy. At Worrells we have also noticed an increased number of enquiry and appointments for Personal Insolvency Agreements.
An analysis of these statistics for the December 2013 quarter when compared to that of the December 2012 quarter shows:
- Total personal insolvency activity decreased 4.49%
- All states except ACT and VIC had a decrease in total personal insolvency activity
- Bankruptcies decreased 7.89%
- Personal insolvency agreements decreased 21.05%
- Debt agreements increased by 3.15%
The above figures reveal that whilst the personal insolvency figures are increasing when compared to the September 2013 quarter, they are still mostly down by a considerable amount when compared to the same period in 2012.
It will be interesting to see how the next quarter plays out, however it our view that we will continue to see a slight increase across most, if not all personal insolvency types over the next three to six months.
For the detailed breakdown of these statistics and accompanying commentary, please visit AFSA’s website at https://www.afsa.gov.au/resources/statistics/provisional-bankruptcy-and-personal-insolvency-statistics/quarterly-statistics/quarterly-statistics-december-quarter-2013