AFSA forecasts personal insolvency numbers to rise

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Personal insolvencies are expected to rise towards pre-COVID levels over the next two years, according to new insights released by the Australian Financial Security Authority (AFSA) today.

The State of the Personal Insolvency System report shows a total of 9,545 personal insolvencies recorded in the 2021-22 financial year – well below half the 10-year average of 25,300 insolvencies annually.

Rising costs of living and wider economic uncertainty are expected to see personal insolvency numbers increase from current historic lows. Factors including debt agreement reforms and the economic response to the COVID-19 pandemic stimulus have influenced falling insolvencies since the last peak in 2017-18. 

AFSA Chief Executive Tim Beresford says AFSA’s role as the personal insolvency regulator will be crucial during this period.

‘Challenges like rising interest rates and high inflation are putting many people under significant financial stress,’ Mr Beresford said.

‘AFSA supports the flow of Australia’s $3.5 trillion credit system by allowing people in financial distress to get a fresh start, while providing a remedy for those who are owed money.’

Most people who entered personal insolvency during 2021-22 had low levels of debt, with 52.7% of insolvencies in the last financial year involving less than $50,000 in liabilities. Just over a quarter of insolvencies had debts totalling more than $100,000.

In total, the personal insolvency system accounts for just under $18 billion in liabilities. The Australian Taxation Office and the ‘Big Four’ banks were the major creditors in personal insolvencies, owed more than $6.1 billion dollars in 2021-22. This included $3.7 billion in business-related personal debt and $2.4 billion in non-business-related personal debt.

Mr Beresford says he expects a range of challenges, opportunities and ideas will be explored at the upcoming personal insolvency roundtable in March.

‘We are aware that many of our stakeholders are interested in potential personal insolvency reforms,’ Mr Beresford said.

‘As announced by the Attorney-General, the Government is keen to explore pressure points of the current personal insolvency system, critical reform areas and longer-term priorities.’

The full report is available at

Further information about the Attorney-General’s personal insolvency roundtable is available at

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About AFSA

AFSA manages the application of bankruptcy and personal property securities laws through the delivery of high-quality personal insolvency and trustee, regulation and enforcement, and personal property securities services.