Causes: non-business related

Statistics and commentary on the causes of non-business related personal insolvencies.

Causes of non-business related personal insolvencies

Main reason for entering a non-business related personal insolvency Number of insolvent debtors in 2012-13 Number of insolvent debtors in 2013-14
Unemployment or loss of income 8333 8418
Excessive use of credit 7649 6999
Domestic discord or relationship breakdown 3063 3056
Ill health 2235 2160
Adverse legal action 659 682
Gambling or speculation 541 544
Liabilities due to guarantees 359 446
Not stated 354 506
Other non-business reason 1851 1627
Total 25044 24438

Most personal insolvencies are not business related

In 2013–14, 81% of debtors entered a personal insolvency because of non-business related reasons or the reason was unknown.

Since 2007–08, the proportion of debtors entering a personal insolvency because of non-business related reasons reached a:

  • peak in 2008–09 (88% of debtors)
  • low in 2012–13 (79% of debtors).

Unemployment or loss of income is the most common cause of non-business related personal insolvencies

In 2013–14, the most common causes of debtors entering non-business related personal insolvencies were:

  • unemployment or loss of income (8418 debtors)
  • excessive use of credit (6999 debtors)
  • domestic discord or relationship breakdowns (3056 debtors).

Causes of debtors entering non-business related personal insolvencies in 2013-14

Compared to other types of personal insolvency, debt agreement debtors were more likely to enter a personal insolvency due to excessive use of credit. In 2013–14, 44% of debtors who entered a non-business related debt agreement did so because of excessive use of credit.

The common non-business related causes are relatively stable over time

The reasons that debtors enter business related personal insolvencies have been stable since 2007–08. Each year:

  • unemployment or loss of income is the most common cause
  • liabilities on guarantees or not stated are the least common causes.

The biggest changes in the proportion of debtors who entered a business related personal insolvency from 2007–08 to 2013–14 were:

  • other non-business related reason increased from 3% to 7%
  • ill health fell from 11% to 9%.

Full report

For the full non-business related personal insolvency causes report see: