AFSA has recently released updated insolvency statistics showing that in the March 2020 quarter, personal insolvencies rose by 4.0% when compared to the previous quarter.
Capital City Stats
There were rises in all capital cities except for Greater Perth, Greater Darwin and the Australian Capital Territory. New personal insolvencies in regions outside capital cities fell 1.1% in the March quarter 2020 compared to the previous quarter.
The proportion of debtors in capital cities rose by 1.2 percentage points in the March quarter 2020 compared to the previous quarter to 65.1%.
Number of Bankruptcies Fell?
The interesting part is that Bankruptcies actually fell by 15.9% which suggests that more debtors are opting for repayment compromises with their Creditors rather than declaring themselves Bankrupt.
Is bankruptcy ahead? It seems not.
What does personal insolvency cover?
The term “Personal insolvencies” covers a range of mechanisms under the Bankruptcy Act, such as a Part IX Debt Agreement or Part X Personal Insolvency Agreement as well as Bankruptcy; the difference is that under a Part IX the debtor negotiates a repayment scheme over a set term, with interest frozen and also then avoids all the restrictions associated with a Debtor’s Petition for Bankruptcy.
If you or someone you know is struggling with debt, then call the team at Life After Debt to discuss options to avoid bankruptcy.