About this analysis
This analysis provides further insights on the financial characteristics of personal insolvencies in the 2021–22 financial year. Data are sourced from AFSA’s live systems and headline figures may not align with AFSA’s official statistics.
Executive summary
- In 2021–22, there were 9,551 personal insolvencies with an average asset value of $125,121.
- 52.7% (5,034) reported less than $50,000 in liabilities.
- The average value of assets for people owing less than $50,000 in liabilities was $29,663, with a median value of $8,495.
- The majority (50.8%) of people owing less than $50,000 in liabilities had less than $10,000 in assets.
- There were 5,995 bankruptcies in 2021–22, with 2,666 having less than $50,000 in liabilities.
- There were 679 repeat bankruptcies – 11.3% of all bankruptcies.
- 427 (16.0%) people with less than $50,000 in liabilities were in a repeat bankruptcy.
- Return to creditors is calculated from personal insolvencies that ended in 2021–22, which includes discharged and terminated administrations.
- $355.9 million was returned to creditors from all personal insolvencies.
- $90.3 million was returned to creditors from people with less than $50,000 in liabilities.
Concentration of debt
People report their liabilities to creditors on their Statement of Affairs when they enter a personal insolvency. Individual debt levels vary from person-to-person based on their personal circumstances, including involvement in a business.
Five thousand and thirty-four (52.7%) people reported less than $50,000 in liabilities to creditors (Figure 1):
- 2,666 bankruptcies
- 2,342 debt agreements
- 26 personal insolvency agreements and deceased estates.
Most people with less than $50,000 liabilities have non-business-related personal insolvencies:
- 4,563 (90.6%) are non-business-related
- 471 (9.4%) are business-related.
Figure 1: Concentration of liabilities by debtors in 2021–22
Table 1: People in personal insolvencies with less than $50,000 liabilities by business type
| Type of administration | Business-related | Non-business-related | Total |
|---|---|---|---|
| Bankruptcy | 363 (13.6%) | 2,303 (86.4%) | 2,666 |
| Debt agreement | 105 (4.5%) | 2,237 (95.5%) | 2,342 |
| Personal insolvency agreement & deceased estate | 3 (11.5%) | 23 (88.5%) | 26 |
| Total personal insolvencies | 471 (9.4%) | 4,563 (90.6%) | 5,034 |
Value of assets
People can hold multiple types of assets when entering a personal insolvency. Their assets are reported on the Statement of Affairs.
Most people who entered personal insolvency with less than $50,000 liabilities have low values of assets (Figure 2).
For people entering a personal insolvency with less than $50,000 liabilities during 2021–22:
- the total value of assets reported on the Statement of Affairs was $149.3 million
- the average value of assets was $29,663
- the median value of assets was $8,495
- 205 (4.1%) reported holding no assets
- 2,559 (50.8%) reported less than $10,000 of assets
- 958 (19.0%) reported between $10,000 and $20,000 of assets.
Figure 2: People in personal insolvencies with less than $50,000 liabilities concentration by assets in 2021–22
The largest assets by value reported by people with less than $50,000 liabilities were:
- superannuation and life insurance policies (46.7% of total asset value)
- vehicles (15.2% of total asset value)
- sale, transfer or gift of assets in the last 5 years (12.7% of total asset value)
- real property (10.2% of total asset value)
- household goods and personal effects (5.5% of total asset value).
The top 5 type of assets account for 90.2% of the total asset value of people with less than $50,000 liabilities.
Some assets are not fully recoverable under the Bankruptcy Act 1966, which prevents resale for the purposes of servicing a debt to their creditors.
Table 2: Value of assets held by people in personal insolvencies with less than $50,000 liabilities in 2021–22
| Business type | Measure | Bankruptcy | Debt agreement | PIA & deceased estate | Total personal insolvencies |
|---|---|---|---|---|---|
| Business-related | Average | $67,384 | $12,592 | $181,579 | $55,897 |
| Median | $11,190 | $9,410 | $219,634 | $10,506 | |
| Non-business-related | Average | $38,251 | $11,767 | $373,112 | $26,955 |
| Median | $8,628 | $8,005 | $82,483 | $8,250 | |
| Total | Average | $42,218 | $11,804 | $351,012 | $29,663 |
| Median | $8,922 | $8,010 | $95,633 | $8,495 |
Prevalence of repeat bankruptcies
People entering bankruptcy can have a history of previous personal insolvencies. Debt agreements require an individual to not have entered a personal insolvency in the last 10 years.
During 2021–22, more than 10% of people entering bankruptcy (11.3%) were identified as having at least one previous personal insolvency. This means that 679 out of 5,995 people in new bankruptcies had a previous formal personal insolvency. We call these repeat bankruptcies.
Of these identified repeat bankruptcies, most (427) had less than $50,000 liabilities:
- 368 had a single previous insolvency
- 49 had 2 incidences of previous insolvencies
- 10 had 3 or more previous insolvencies.
Table 3: Prevalence of repeat bankruptcies by value of liabilities in 2021–22
| Value of liabilities | No repeat bankruptcy | Repeat bankruptcy | Total |
|---|---|---|---|
| No reported liabilities | 360 (93.3%) | 26 (6.7%) | 386 |
| Less than $50k | 2,239 (84.0%) | 427 (16.0%) | 2,666 |
| $50k – $99k | 918 (87.5%) | 131 (12.5%) | 1,049 |
| $100k – $149k | 359 (91.6%) | 33 (8.4%) | 392 |
| $150k – $199k | 239 (94.5%) | 14 (5.5%) | 253 |
| $200k – $249k | 170 (98.3%) | 3 (1.7%) | 173 |
| $250k – $499k | 437 (95.6%) | 20 (4.4%) | 457 |
| $500k – $1m | 274 (96.1%) | 11 (3.9%) | 285 |
| Over $1m | 320 (95.8%) | 14 (4.2%) | 334 |
| Total bankruptcies | 5,316 (88.7%) | 679 (11.3%) | 5,995 |
Returns to creditors
There were 27,403 administrations where people have exited a personal insolvency in 2021–22.
- In total, $355.9 million was returned to creditors.
- 11,847 (43.2%) administrations had less than $50,000 liabilities.
For completed administrations with less than $50,000 liabilities:
- 5,344 (45.1%) administrations had no returns to creditors
- almost all administrations were bankruptcies (5,311)
- 33 debt agreements with less than $50,000 liabilities had no return to creditors.
Completed administrations with less than $50,000 liabilities returned $90.3 million to creditors. Of these:
- debt agreements returned $81.8 million to creditors
- bankruptcies returned $8.4 million to creditors
- the remaining $79,000 returned to creditors was from personal insolvency agreements and deceased estates.
Figure 3: Concentration of completed administrations by value of liabilities in 2021–22
Table 4: Number of completed administrations with less than $50,000 liabilities by return to creditors in 2021–22
| Type of administration | No returns to creditors | Returns made to creditors | Total administrations |
|---|---|---|---|
| Bankruptcy | 5,311 (97.1%) | 158 (2.9%) | 5,469 |
| Debt agreement | 33 (0.5%) | 6,341 (99.5%) | 6,374 |
| Personal insolvency agreement or deceased estate | 0 (0.0%) | 4 (100.0%) | 4 |
| Total personal insolvency | 5,344 (45.1%) | 6,503 (54.9%) | 11,847 |
Figure 4: Value of returns to creditors by grouped value of liabilities of completed administrations in 2021–22
Data caveat
‘Completed administrations’ are administrations where people were discharged from the personal insolvency.
- The person may be discharged for any reason.
- For joint administrations, all people must be discharged before the administration is defined as ‘completed’.
The value of liabilities for an administration is the total liabilities owed by all people in the administration.
The reported assets in this analysis are the total assets reported by people on their Statement of Affairs. This includes assets that are not recoverable under current legislation to service their debts. Data on previous personal insolvencies for new debt agreements and personal insolvency agreements is currently unavailable.
Charts containing large amounts of money have shortened units of measurement for thousands (k) and millions (m). Percentages are rounded to the first decimal place, which means some cumulative percentages may not round to 100 per cent.
For further information about this analysis, please contact media@afsa.gov.au
Appendix A: Type of bankruptcies with less than $50,000 in liabilities
- There were 2,666 bankruptcies with less than $50,000 in liabilities in 2021–22.
- People can enter bankruptcy voluntarily or involuntarily.
- Voluntary bankruptcies are entered via ‘debtor’s petition’.
- Involuntary bankruptcies are entered via ‘sequestration order’.
- Most people are voluntarily entering bankruptcy with 2,579 (96.7%) bankruptcies in 2021–22 via debtor’s petition. Eighty-seven (3.3%) people became bankrupt via sequestration order.
- For bankrupts with less than $50,000 in liabilities, the median value of liabilities was $23,996.
- The median for debtor’s petitions was $24,086.
- The median for sequestration orders was $17,000.
- Bankrupts with less than $10,000 in reported liabilities represent 14.0% of all bankrupts with less than $50,000 in liabilities.
Table A: Number of bankrupts by type of bankruptcies with less than $50,000 liabilities in 2021–22
| Value of liabilities | Debtor’s petitions | Sequestration orders | Total bankruptcies |
|---|---|---|---|
| Less than $10k | 347 (92.8%) | 27 (7.2%) | 374 |
| $10k – $19k | 685 (97.2%) | 20 (2.8%) | 705 |
| $20k – $29k | 600 (97.6%) | 15 (2.4%) | 615 |
| $30k – $39k | 523 (97.2%) | 15 (2.8%) | 538 |
| $40k – $49k | 424 (97.7%) | 10 (2.3%) | 434 |
| Total bankruptcies with less than $50,000 liabilities | 2,579 (96.7%) | 87 (3.3%) | 2,666 |
Appendix B: Creditor’s petitions in 2021–22
- If someone is owed $10,000 or more, they can apply to the court to have a person made bankrupt. This is called a creditor’s petition.
- A creditor’s petition is a step towards a court issuing a sequestration order to make a person bankrupt.
- There were 1,013 creditor’s petitions lodged in 2021–22.
- Almost half (48.9%) were for debts of $50,000 or more.
- The median value of debt claims in a creditor’s petition was $49,723.
- 215 (21.2%) creditor’s petitions had debt claims of between $10,000 and less than $20,000.
Table B: Number of creditor’s petitions lodged by value of claims in 2021–22
| Value of claims | Number of creditor’s petitions | Proportion of total creditor’s petitions |
|---|---|---|
| Claims not reported | 21 | 2.1% |
| Less than $10k | 0 | 0.0% |
| $10k – $19k | 215 | 21.2% |
| 21.2% | 131 | 12.9% |
| $30k – $39k | 93 | 9.2% |
| $40k – $49k | 58 | 5.7% |
| $50k or more | 495 | 48.9% |
| Total | 1,013 | 100% |