Australian personal insolvencies have fallen significantly year on year but are up sharply quarter on quarter:
Insolvency and Trustee Service Australia released the provisional personal insolvency activity statistics for the June quarter 2013 and 2012 13 today.
Ms Veronique Ingram, Chief Executive of Insolvency and Trustee Service Australia, said that debt agreements reached the highest annual
number on record in 2012–13.“During the last decade, debt agreements increased from 16% of total personal insolvency activity to 31% of total personal insolvency activity
while Australia’s level of personal insolvency activity remains relatively stable,” she said.Personal insolvency activity 2012–13
- Debt agreement activity in 2012–13 reached the highest level on record in a financial year.
- Bankruptcies decreased in 2012–13 compared to 2011–12 in all states and increased in the Australian Capital Territory and the Northern Territory.
- Personal insolvency agreement activity in 2012–13 is at the lowest level in a financial year since 2006–07.
Personal insolvency activity in the June quarter 2013
“Bankruptcies increased nearly eight percent in the June quarter 2013 compared to the March quarter 2013. To put this into perspective,
bankruptcies in the March quarter 2013 were at their lowest level since the March quarter 1996,” Ms Ingram said.Personal insolvency activity increased in the June quarter 2013 compared to the March quarter 2013:
- bankruptcies recorded the strongest quarterly increase since the June quarter 2008.
- personal insolvency agreements recorded the strongest quarterly increase since the September quarter 2011.
- Victoria, South Australia, Australian Capital Territory and Northern Territory recorded increases in total personal insolvency activity in the June quarter 2013 compared to the June quarter 2012.
The real story here is not insolvencies, it’s debt agreements. As Banking Day points out, The Consumer Action Law Centre reckons:
…many people who have entered into debt agreements under Part IX of the Bankruptcy Act were unaware of the serious consequences of such a decision.
A Part IX agreement will be listed on a credit report for seven years and is likely to be viewed by creditors as an act of bankruptcy.
…Consumer Action looked at advertising by administrators of debt agreements and found that many businesses appear to overstate the differences between debt agreements and bankruptcy, or to understate the consequences of entering a debt agreement.
It said that in some cases the debtor would be better off going into bankruptcy. If the debtor is below the income threshold required for contributions, bankruptcy may mean that they don’t have to pay anything to creditors.
media-release-record-number-of-insolvent-debtors-enter-debt-agreements-in-2012201313.pdf by James Woods
