Mar 2014 Quarter Stats

Quarterly personal insolvency activity in Australia

Quarterly personal insolvency activity in Australia

Key points

  • Bankruptcies increased 3.31% in the March quarter 2014 compared to the March quarter 2013.
  • The number of debt agreements in the March quarter 2014 is the highest number on record in a quarter.
  • Debt agreements in Queensland and Western Australia in the March quarter 2014 are the highest number on record in a quarter.
  • The number of personal insolvency agreements in the March quarter 2014 is the lowest number recorded since the March quarter 2007.
  • The fall in personal insolvency agreements did not offset increases in bankruptcies and debt agreements. As a result, total personal insolvency activity increased 6.11% in the March quarter 2014 compared to the March quarter 2013.
  • Victoria and Western Australia recorded the highest increases in total personal insolvency activity, increasing 15.21% and 19.47% respectively in the March quarter 2014 compared to the March quarter 2013.

Total personal insolvency activity

Total personal insolvency activity increased 6.11% in the March quarter 2014 (7 655) compared to the March quarter 2013 (7 214) and rose 2.16% compared to the December quarter 2013 (7 493).

The increase in total personal insolvency activity in the March quarter 2014 compared to the March quarter 2013 was the result of increases in total personal insolvency activity in:

  • Victoria (15.21%)
  • Queensland (7.02%)
  • Western Australia (19.47%)
  • New South Wales (1.32%).

These increases were partly offset by falls in:

  • South Australia (-5.07%)
  • Northern Territory (-28.57%)
  • Australian Capital Territory (-10.64%)
  • Tasmania (-1.00%).

The 6.11% increase in total personal insolvency activity in the March quarter 2014 compared to the March quarter 2013 follows a 4.49% fall in the December quarter 2013 compared to the December quarter 2012.

Total personal insolvency activity in Australia: % change compared to same quarter in previous year

Total personal insolvency activity in Australia: % change compared to same quarter in previous year

Bankruptcies

The number of bankruptcies increased 3.31% in the March quarter 2014 (4 932) compared to the March quarter 2013 (4 774) and increased 1.82% compared to the December quarter 2013 (4 844). This is the first increase compared to the same period in the previous year since the September quarter 2012.

The increase in bankruptcies in the March quarter 2014 compared to the March quarter 2013 was the result of increases in the number of bankruptcies in:

  • Victoria (8.67%)
  • New South Wales (3.28%)
  • Queensland (2.27%)
  • Western Australia (9.01%).

These increases were partly offset by falls in:

  • Australian Capital Territory (-33.90%)
  • South Australia (-3.01%)
  • Northern Territory (-17.39%)
  • Tasmania (-0.71%).

The 3.31% increase in bankruptcies in the March quarter 2014 compared to the March quarter 2013 follows a fall of 7.89% in the December quarter 2013 compared to the December quarter 2012.

Bankruptcies in Australia: % change compared to same quarter in previous year

Bankruptcies in Australia: % change compared to same quarter in previous year

Changes to bankruptcy fees

A person can become bankrupt by filing his or her own debtor’s petition with the Official Receiver or by a sequestration order made by the court on the petition of a creditor.

The Australian Government stated in the Mid Year Economic and Fiscal Outlook that personal insolvency fees would be increased to fully recover the costs of administering personal insolvencies.

A new fee for the lodgement of a debtor’s petition will commence from 1 April 2014. The number of bankruptcies on debtor’s petition was relatively stable in the March quarter 2014 compared to the March quarter 2013 (4 400 compared to 4 388). Eighty nine percent of bankruptcies were on debtor’s petition in the March quarter 2014, a fall from 92% in the March quarter 2013.

Number of bankruptcies on debtor’s petition by month

2012 2013 2014
Number of bankruptcies on debtor’s petitions: January 1568 1451 1237
Number of bankruptcies on debtor’s petition: February 1756 1496 1501
Number of bankruptcies on debtor’s petition: March 1701 1441 1662
Number of bankruptcies on debtor’s petition: March quarter 5025 4388 4400

The Federal Court and Federal Circuit Court Regulation 2012 sets fees that are payable in proceedings in the Federal Court of Australia and the Federal Circuit Court of Australia. From 1 January 2013, the filing fee for creditors increased. Eleven percent of bankruptcies were on sequestration orders in the March quarter 2014, an increase from 8% in the March quarter 2013.

Number of bankruptcies on sequestration order by month

2012 2013 2014
Number of bankruptcies on sequestration order: January 59 95 128
Number of bankruptcies on sequestration order: February 238 139 236
Number of bankruptcies on sequestration order: March 228 152 168
Number of bankruptcies on sequestration order: March quarter 525 386 532

Debt agreements

The number of debt agreements in the March quarter 2014 is the highest number on record in a quarter. The number of debt agreements increased 12.71% in the March quarter 2014 (2 678) compared to the March quarter 2013 (2 376) and rose 3.44% compared to the December quarter 2013 (2 589).

The increase in debt agreements in the March quarter 2014 compared to the March quarter 2013 was the result of increases in the number of debt agreements in:

  • Victoria (30.97%)
  • Queensland (17.56%)
  • Western Australia (41.27%)
  • Australian Capital Territory (28.57%).

These increases were partly offset by falls in:

  • South Australia (-11.76%)
  • New South Wales (-1.29%)
  • Northern Territory (-38.46%).

The number of debt agreements in Tasmania was stable in the March quarter 2014 compared to the March quarter 2013.

The 12.71% rise in debt agreements in the March quarter 2014 compared to the March quarter 2013 follows a rise of 3.15% in the December quarter 2013 compared to the December quarter 2012.

Debt agreements in Australia: % change compared to same quarter in previous year

Debt agreements in Australia: % change compared to same quarter in previous year

Personal insolvency agreements

Personal insolvency agreement activity shows higher volatility than bankruptcies and debt agreements due to the smaller numbers recorded each quarter. Personal insolvency agreements comprised 0.59% of total personal insolvency activity in the March quarter 2014.

The number of personal insolvency agreements in the March quarter 2014 is the lowest number recorded since the March quarter 2007. The number of personal insolvency agreements fell 29.69% in the March quarter 2014 (45) compared to the March quarter 2013 (64) and fell 25.00% compared to the December quarter 2013 (60).

The fall in personal insolvency agreements in the March quarter 2014 compared to the March quarter 2013 was the result of decreases in the number of personal insolvency agreements in:

  • New South Wales (-40.00%)
  • Western Australia (-38.46%)
  • Victoria (-17.65%)
  • Queensland (-30.00%)
  • Tasmania (-100.00%).

These falls were partly offset by a rise in South Australia (33.33%). There was no change in the Northern Territory and the Australian Capital Territory.

The 29.69% fall in personal insolvency agreements in the March quarter 2014 compared to the March quarter 2013 follows a fall of 21.05% in personal insolvency agreements in the December quarter 2013 compared to the December quarter 2012.

Personal insolvency agreements in Australia: % change compared to same quarter in previous year

Personal insolvency agreements in Australia: % change compared to same quarter in previous year