Commentary

Read more about debtors with a business related personal insolvency in the March quarter 2017.

Proportion of debtors with a business related personal insolvency in Australia

Key points

  • In the March quarter 2017, 16.5% of debtors entered a business related personal insolvency. This is a fall from 17.7% in the December quarter 2016.
  • In the March quarter 2017:
    • economic conditions (392 debtors) was the most common business related cause
    • excessive use of credit (2,387 debtors) was the most common non-business related cause.

Proportion of debtors with a business related personal insolvency

In the March quarter 2017, 16.5% of debtors entered a business related personal insolvency. By type of insolvency:

  • 24.1% of bankrupts entered a business related bankruptcy. This is a fall from 24.7% in the December quarter 2016.
  • 7.1% of debt agreement debtors entered a business related debt agreement. This is a fall from 7.7% in the December quarter 2016.
  • 22.6% of personal insolvency agreement debtors entered a business related personal insolvency agreement. This is a fall from 46.7% in the December quarter 2016.

Top reasons for bankrupts entering bankruptcies

Business related bankruptcies

When we could identify a specific reason, the most common reasons for entering business related bankruptcies in the March quarter 2017 were:

  • economic conditions (280 bankrupts)
  • personal reasons including ill health (62 bankrupts)
  • excessive drawings (53 bankrupts).

Non-business related bankruptcies

When we could identify a specific reason, the most common reasons for entering non-business related bankruptcies in the March quarter 2017 were:

  • unemployment or loss of income (1,068 bankrupts)
  • excessive use of credit (670 bankrupts)
  • domestic discord or relationship breakdown (366 bankrupts).

Top reasons for debtors entering debt agreements

Business related debt agreements

The most common reasons for entering business related debt agreements in the March quarter 2017 were:

  • economic conditions (107 debtors)
  • personal reasons including ill health (45 debtors)
  • lack of business ability (34 debtors)
  • excessive interest (34 debtors).

Non-business related debt agreements or not stated

The most common reasons for entering non-business related debt agreements in the March quarter 2017 were:

  • excessive use of credit (1,680 debtors)
  • unemployment or loss of income (987 debtors)
  • domestic discord or relationship breakdown (457 debtors).

Top reasons for debtors entering personal insolvency agreements

Business related personal insolvency agreements

When we could identify a specific reason, the most common reason for entering business related personal insolvency agreements in the March quarter 2017 was economic conditions (5 debtors).

Non-business related personal insolvency agreements or not stated

When we could identify a specific reason, the most common reasons for entering non-business related personal insolvency agreements in the March quarter 2017 were:

  • excessive use of credit (37 debtors)
  • unemployment or loss of income (10 debtors)
  • domestic discord or relationship breakdown (4 debtors).