Bankruptcy Statistics

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).

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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 non-business causes time series [XLSX 18.3 KB].

Causes: business related

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

Causes of business related personal insolvencies

Main reason for entering a business related personal insolvency Number of insolvent debtors in 2012-13 Number of insolvent debtors in 2013-14
Economic conditions 2680 2378
Excessive drawings 338 395
Excessive interest 287 227
Failure to keep proper books 150 158
Gambling or speculation 41 35
Inability to collect debts 137 125
Lack of business ability 272 245
Lack of capital 353 398
Personal reasons including ill health 492 446
Seasonal conditions 132 103
Other business reason 1862 1347
Total 6744 5857

Most personal insolvencies are not business related

In 2013-14, 19% of debtors entered a personal insolvency because of business related reasons.

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

  • peak in 2012–13 (21% of debtors)
  • low in 2008–09 (12% of debtors).

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Economic conditions are the most common cause of business related personal insolvencies

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

  • economic conditions (2378 debtors)
  • other business reason (1347 debtors)
  • personal reasons including ill health (446 debtors)
  • lack of capital (398 debtors).

Causes of debtors entering 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 lack of capital. In 2013–14, 27% of debtors who entered a business related debt agreement did so because of lack of capital.

The common 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:

  • economic conditions is the most common cause
  • gambling or speculation is the least common cause.

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

  • economic conditions increased from 29% to 41%
  • lack of business ability fell from 11% to 4%.

Full report

For the full business related personal insolvency causes report see business causes time series [XLSX 19.3 KB].

SOURCE: AFSA