December quarter unveils personal insolvency surge: AFSA

The Australian Financial Security Authority (AFSA) recorded an increase in personal insolvencies over the December 2024 quarter in comparison to the December 2023 quarter.

The data revealed 2,794 new personal insolvencies in the three months to December 2024, up from 2,608 in December 2023, a 7.1 per cent increase.

Of these 2,794 personal insolvencies, 1,646 were bankruptcies, 1,083 were debt agreements, 58 were personal insolvency agreements, and seven were insolvent deceased estates.

The results also highlighted that 837 of the 2,794 personal insolvencies in December 2024 were business-related, up from 713 in the December quarter of 2023.

Tim Beresford, chief executive of AFSA, said the moderate increase in personal insolvencies was concerning, and those facing financial difficulty should seek help sooner rather than later.

“The potential for system misuse is elevated during times of financial vulnerability, so it’s vital that anyone experiencing financial uncertainty knows where they can find trustworthy advice,” he said.

“This could mean talking to trustees, financial planners, bookkeepers or accountants. Visiting AFSA’s website can also be a good place to start, pointing you in the right direction about what resources you can use and who to speak to.”

Personal insolvencies were shown to have risen moderately in NSW and Victoria, while decreasing in Tasmania and remaining steady in Western Australia and the Northern Territory.

NSW recorded 503 personal insolvencies in urban areas, while 339 were regional, adding up to 842 for the quarter.

Behind this was Queensland with 670 personal insolvencies across the state for the quarter, followed by 599 in Victoria, while the Northern Territory came in with the smallest number of personal insolvencies at 23 for the quarter.

Beresford said AFSA would work to help ease the pressures and challenges in the market that had led to an increase in personal insolvencies.

“AFSA is also elevating its focus on vulnerability in 2025,” Beresford said.

“In this environment, it is important for us to identify and mitigate system harms, use our data and intelligence effectively, provide targeted education and outreach, and ensure we refer people to the services they need.”