Commentary

Read more about debtors with a business related personal insolvency in the December quarter 2016.

Key points

  • In the December quarter 2016, 17.7% of debtors entered a business related personal insolvency.  This is a fall from 18.4% in the September quarter 2016.
  • In the December quarter 2016:
    • economic conditions (411 debtors) was the most common business related cause
    • unemployment or loss of income; and excessive use of credit (both with 1,873 debtors) were the most common non-business related causes.

Proportion of debtors with a business related personal insolvency

In the December quarter 2016, 17.7% of debtors entered a business related personal insolvency. By type of insolvency:

  • 24.7% of bankrupts entered a business related bankruptcy. This is a fall from 27.2% in the September quarter 2016.
  • 7.7% of debt agreement debtors entered a business related debt agreement. This is a rise from 6.5% in the September quarter 2016.
  • 46.7% of personal insolvency agreement debtors entered a business related personal insolvency agreement. This is a rise from 37.0% in the September quarter 2016.

Top reasons for bankrupts entering bankruptcies

Business related bankruptcies

When we could identify a specific reason, the most common reasons for entering business related bankruptcies in the December quarter 2016 were:

  • economic conditions (293 debtors)
  • personal reasons including ill health (68 debtors)
  • excessive drawings (50 debtors).

Non-business related bankruptcies

When we could identify a specific reason, the most common reasons for entering non-business related bankruptcies in the December quarter 2016 were:

  • unemployment or loss of income (990 bankrupts)
  • excessive use of credit (543 bankrupts)
  • domestic discord or relationship breakdown (389 bankrupts).

Top reasons for debtors entering debt agreements

Business related debt agreements

The most common reasons for entering business related debt agreements in the December quarter 2016 were:

  • economic conditions (115 debtors)
  • personal reasons including ill health (60 debtors)
  • excessive interest (24 debtors).

Non-business related debt agreements or not stated

The most common reasons for entering non-business related debt agreements in the December quarter 2016 were:

  • excessive use of credit (1,321 debtors)
  • unemployment or loss of income (880 debtors)
  • domestic discord or relationship breakdown (369 debtors).

Top reasons for debtors entering personal insolvency agreements

Business related personal insolvency agreements

When we could identify a specific reason, the most common reasons for entering business related personal insolvency agreements in the December quarter 2016 were:

  • economic conditions (3 debtors)
  • excessive interest (2 debtors)
  • lack of business ability (2 debtors).

Non-business related personal insolvency agreements or not stated

When we could identify a specific reason, the most common reasons for entering non-business related personal insolvency agreements in the December quarter 2016 were:

  • excessive use of credit facilities (9 debtors)
  • liabilities incurred on guarantees (3 debtors)
  • unemployment or loss of income (3 debtors).