Latest News

The number of new personal insolvencies increased in December 2024 to 2794,  this is up from 2,608 in December 2023, which is 7.1% higher than in the same period last year.

Of these, 837 were operation in a business as a sole trader, in partnership or as a director in a company.

For more information about monthly statistics, visit the AFSA website: https://www.afsa.gov.au/about-us/statistics-and-insights/quarterly-personal-insolvency-statistics

With frequent news articles and commentary about the “cost of living crisis” it would be easy to expect that the number of personal insolvencies in Australia are “through the roof”.

This is not in fact the case, AFSA reports that in the 2023-24 financial year there were only 11,644 personal insolvencies, compared to 10-year average of 21,252 per annum.  Whilst personal insolvency numbers are predicted to increase this financial year, the number is projected to only increase to approximately 13,400.

See the attached report for further information on AFSA’s findings. 

Link - State of Personal Insolvency Report released for 2024 |Australian Financial Security Authority

Western Australian man John James Simpson has been sentenced to 20 months in prison, with eligibility for release on a recognisance order after serving 6 months in custody. 

Mr. Simpson, a four-time bankrupt, was sentenced in the Perth District Court after pleading guilty to nine offences under the Bankruptcy Act 1966. His crimes included fraud, failing to disclose his bankruptcy, and accumulating nearly $400,000 in debt while running JJS Crane Hire Services.

Judge Miocevich emphasized the seriousness of Simpson’s actions, citing significant harm to creditors and the need for deterrence. The sentence includes custodial time and reparation orders totaling $119,372.88.

AFSA’s Acting National Manager, Tim Cole, welcomed the verdict, stating it reflects the importance of compliance with bankruptcy laws and AFSA's commitment to prosecuting fraudulent behavior. The case, prosecuted by the CDPP, underscores the agency's dedication to maintaining a fair insolvency system.

Read the full West Australian article here - https://www.afsa.gov.au/newsroom/west-australian-man-jailed-9-bankruptcy-offences

Over the last 10 years, there has been an ongoing discussion regarding an alternative to bankruptcy where the debtor has limited assets and there is little prospect of a return to creditors.

A proposal for a 1-year bankruptcy was put before Parliament, but didn’t proceed.  The Government has now proposed a new alternative, the Minimal Asset Procedure (“MAP”).   The potential elements of the MAP are:

• there be a maximum debt threshold of $50,000
• the MAP would last for 12 months, with a period of 4 years post-discharge to be      listed on the NPII
• a maximum threshold for income would be determined for eligibility for entry into a MAP
• a maximum threshold of $10,000 in assets with exceptions for tools of trade and a vehicle to be eligible for entry into a MAP
• a debtor may only enter into a MAP once during their lifetime
• a MAP should be less onerous than a bankruptcy

The proposal is still at the discussion stage, so watch this space.