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30 Apr 2015

March Qtr Statistics—Bankruptcy on the rise

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2 min

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PIAs and Debt Agreements are not the flavour of the qtr

Last month the Australian Financial Security Authority (AFSA) released the March quarter personal insolvency activity statistics.

An analysis of these statistics for the March 2015 quarter compared to the December 2014 quarter shows:


  • Total personal insolvency activity increased by 1.5%
  • Bankruptcy increased by 4.8%
  • Debt agreements decreased by 3.3%
  • Personal insolvency agreements decreased by 22.2%

An analysis of the statistics for the March 2015 quarter compared to the March 2014 quarter shows:


  • Total personal insolvency activity decreased by 8.7%
  • All states except for NT and ACT experienced a decrease in total personal insolvency activity
  • Bankruptcies decreased by 11.2%
  • Personal insolvency agreements decreased by 6.7%
  • Debt agreements decreased by 4.1%

So what do all the statistics mean?

Unlike the Sydney property market, the insolvencies number cannot continue to rise unabated.

Maybe the decrease is a sign of consumer and business confidence or simply the calm before the storm. I think we will really have to wait a few more quarters to make that assessment.

As seen in the quarterly analysis below, the numbers are quite volatile and really depend upon the prevailing economic conditions.






















Bankruptcy

Debt Agreements

PIAs

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%

Mar-15

4.8%

-3.3%

-22.2%

1.5%


With that in mind, it is very difficult to forecast what is going to happen in the next quarter.

I have asked a few of the Worrells Partners and got mixed responses. However, the overwhelming response was that insolvency numbers will continue to decrease over the next 6-12 months.

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-march-quarter-2015

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