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30 Jan 2015

Dec 14 Qtr Statistics - All Personal Insolvency types decreasing

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Even debt agreements have decreased!

Last month the Australian Financial Security Authority (AFSA) released the December 2014 quarter personal insolvency activity statistics. This is the first quarter for many years that all types of personal insolvency have decreased when compared to the previous quarter. Further, not since June 2013 has there been a quarter where debt agreements have decreased when compared to the previous quarter.

An analysis of these statistics for the December 2014 quarter compared to the September 2014 quarter shows:


  • Total personal insolvency activity decreased by 7.7%
  • Bankruptcy decreased by 4.8%
  • Debt agreements decreased by 11.8%
  • Personal insolvency agreements decreased by 18.2%

An analysis of the statistics for the December 2014 quarter compared to the December 2013 quarter shows:


  • Total personal insolvency activity decreased 8.1%
  • All states except for WA and NT experienced a decrease in total personal insolvency activity
  • Bankruptcies decreased by 13.7%
  • Personal insolvency agreements decreased by 10%
  • Debt agreements increased by 2.5%

The December 2014 results are a bit of a surprise to us at Worrells. In our November e-update we previously forecasted that bankruptcy numbers would remain fairly static, but increase slightly, and it was our view that the personal insolvency agreement numbers would continue to increase. Just like the weather man occasionally gets it wrong, in this instance so did we.

In reviewing the numbers for the past 18 months it can be seen that the bankrupt and personal insolvency agreement numbers change every quarter. The following is a summary of the % changes per quarter when compared to the prior quarter;




















Bankruptcy

Debt Agreements

PIA's

Total

Quarter

% change

% change

%change

% change

Jun-13

7.9%

-1.3%

12.5%

4.9%

Sep-13

-3.6%

4.9%

-23.6%

-1.1%

Dec-13

-2.5%

5.3%

9.1%

0.1%

Mar-14

1.8%

3.4%

-25.0%

2.2%

Jun-14

-21.8%

11.2%

6.7%

-10.1%

Sep-14

13.8%

1.0%

37.5%

8.5%

Dec-14

-4.8%

-11.8%

-18.2%

-7.7%


As you can see in the table above, bankruptcy and personal insolvency agreements are quite volatile and are changing by significant amounts each quarter. Only debt agreements show any consistency in the numbers.

With that in mind, it is very difficult to forecast what is going to happen in the next quarter. However, our view is, we will continue to see decreases in bankruptcy and personal insolvency agreement numbers, albeit rather small. We believe we will again see an increase in the debt agreement numbers.

For the detailed breakdown of AFSA’s statistics and accompanying commentary, visit AFSA's website at https://www.afsa.gov.au/resources/statistics/provisional-bankruptcy-and-personal-insolvency-statistics/quarterly-statistics/quarterly-statistics-december-quarter-2014

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