Causes of personal insolvency

The causes of business related and non-business related personal insolvencies.

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This zip file contains statistics on causes of personal insolvency published by AFSA for the financial year 2016–17. Individual links to all tables packaged in the zip file are provided on this page. Some data cited in associated commentary (related to age, sex and state or territory of residence of debtors) are not included in this zip file.

Non-business related causes of personal insolvencies

Main non-business related cause of personal insolvency Number of insolvent debtors in 2015–16 Number of insolvent debtors in 2016–17
Excessive use of credit 7,697 8,870
Unemployment or loss of income 8,336 8,035
Domestic discord or relationship breakdown 3,083 3,222
Ill health 1,882 1,830
Gambling or speculation 542 525
Adverse legal action 500 386
Liabilities due to guarantees 293 232
Not stated 376 565
Other non-business reason 1,760 1,560
Total 24,469 25,225

Business related causes of personal insolvencies

Main business related cause of personal insolvency Number of insolvent debtors in 2015–16 Number of insolvent debtors in 2016–17
Economic conditions 1,921 1,779
Personal reasons, including ill health 325 471
Excessive drawings 334 310
Lack of business ability 256 283
Excessive interest 169 224
Lack of capital 203 155
Failure to keep proper books 158 113
Inability to collect debts 111 107
Gambling or speculation 38 56
Seasonal conditions 65 29
Other business reason 2,054 2,143
Total 5,634 5,670

Most personal insolvencies are not business related

In 2016–17, 18.4% of debtors entered a personal insolvency due to business related causes. Since 2007–08, the proportion of debtors entering a personal insolvency due to business related causes has fluctuated between:

  • a peak of 21.3% of debtors in 2012–13; and
  • a low of 12.5% of debtors in 2008–09.

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