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ARTICLE · 10 SEPTEMBER 2018

Bankruptcies on the rise

Worrells
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It is expected that one-year bankruptcy could provide a compelling alternative to debt agreements for consumer debtors.

AustraliaInsolvency/Bankruptcy/Re-Structuring
Brendan Giles
Brendan Giles
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Is the popularity of the debt agreement coming to an end?

Personal insolvency statistics for the June 2018 quarter released by the Australian Financial Security Authority (AFSA) shows the growth continues, with total personal insolvencies increasing 7.4% in the quarter. This was the fourth consecutive quarter of an increase and the ninth quarter of growth in the last ten. This growth was most notable in the Northern Territory and Western Australia, where both revealed record numbers of personal insolvencies in the June quarter 2018.

The long run of debt agreement growth (now twelve consecutive quarters of growth) is finally showing signs of slowing down, with debt agreements growing at only 1.5% in the June 2018 quarter. This was the lowest percentage increase in debt agreements since September 2015.

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