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Figures released by the Australian Financial Security Authority (AFSA) show personal insolvencies across Australia have continued to increase, as forecasted.

A total of 3,596 new personal insolvencies were recorded in the 3-month period to June 2026, compared to 3,179 in June 2025. This is a 13.1% increase compared to the same period last year. Debt agreements increased 17.1% and bankruptcies increased 9.6%.

New South Wales recorded the highest number of new personal insolvencies in the quarter (1,085), followed by Queensland (944) and Victoria (787). Bankruptcies were the most common type of personal insolvency across all states and territories, except Western Australia and the Northern Territory, where debt agreements were the most prevalent type.

Those living in capital city regions entered personal insolvency at a higher rate compared to their country counterparts in all states except Tasmania.

Of the new personal insolvencies recorded during the period, over a quarter (30.4%) reported business involvement.

Australians experiencing financial difficulty are encouraged to seek help early in order to assist individuals find a solution that works for their circumstances.

Mr Beresford said the June quarter figures highlight the importance of early intervention and access to trusted advice.

“While personal insolvencies continue to increase, there are options available to help people manage financial difficulties. Seeking independent advice early can help individuals understand their choices and find a solution that is appropriate for their circumstances.”

More information about these statistics is available at Quarterly personal insolvency statistics.
You can read their full report here 

With approximately $56 billion in uncollected undisputed debt, the ATO is continuing to ramp up its debt collection activities, using a range of tools to recover outstanding tax debts, including:

• Director Penalty Notices issued: 2025 - 84,000 compared to 26,702 in 2024. That is on average 230 per day!
• Garnishee Notices – directly claiming funds from business bank accounts
• Tax Debt Disclosure – reporting businesses to credit reference agencies
• Bankruptcy and winding up applications – for individuals and businesses with significant unpaid debts
• Departure Prohibition Orders – these prevent individuals with large debts from leaving Australia
• Pay Day Super

Financial Pressure on Businesses

Operating a business can be tough. There are pressures from all sides - increasing costs of living, employee and contractor issues, competition from larger businesses and the ongoing challenge of managing cash flow.

However, you don’t need to navigate financial difficulties alone.

The ATO’s message is clear: engagement is key.

If you cannot pay your tax bill, don’t ignore it. Lodge your tax returns as and when they fall due, and speak with the ATO or your accountant for advice.

Your business may be experiencing financial difficulty. This is often referred to as being “insolvent” - that is, being unable to pay your debts as and when they fall due.

If you believe your business is, or may be at risk of becoming, insolvent, it is important to seek specialist advice from a qualified insolvency accountant, liquidator or trustee.

The earlier you seek advice, the more options may be available to you to address the situation.

The Reserve Bank of Australia (RBA) has confirmed that surcharges on debit and credit card payments across EFTPOS, Mastercard and Visa will be banned from 1 October 2026.

The decision follows the RBA's review of merchant card payment costs and surcharging, which found that surcharges are no longer achieving their original purpose of encouraging consumers to choose lower-cost payment methods. Many consumers now find surcharges difficult to avoid, and businesses and customers alike often find the rules complex and confusing.

Key outcomes of the review include:

• The removal of all debit and credit card surcharges from 1 October 2026
• Lower interchange fee caps for debit and consumer credit card payments, helping reduce payment costs for businesses, particularly small businesses
• Greater transparency, with EFTPOS, Mastercard, Visa and large payment providers required to publish fee information and provide more standardised merchant statements

What does this mean for your business?

Now is the time to:

• Review your merchant service fees
• Speak with your payment provider about negotiating better rates
• Update pricing strategies and POS systems
• Factor the changes into your future cashflow planning

While the end of surcharging may simplify pricing and reduce compliance requirements, businesses should start preparing early to ensure a smooth transition before October 2026.

If you'd like help understanding how these changes may affect your business, our specialist team is here to help.

Recently, a Western Australian man has been sentenced in the Perth Magistrates Court after pleading guilty to two offences under the Bankruptcy Act. 

In April 2026, a sentence of 3 months' imprisonment for each offence was issued, to be served concurrently.

His conduct involved: 

• failing to disclose an inheritance to his registered trustees and;
• dealing with the funds by transferring the funds to another bank account after the filing of his bankruptcy petition.

Magistrate Urquhart released Mr Machin on a $1,000 Recognizance Release Order with a condition that he be of good behaviour for 12 months.

Hidden inheritance 

Mr Machin became bankrupt in April 2021 by way of a Debtor's Petition, and registered trustees were appointed to administer his bankrupt estate.

On 30 December 2021 - approximately 6 months into his bankruptcy - a Grant of Probate was issued naming Mr Machin as both executor and beneficiary of a will. He was entitled to receive $124,780, but failed to disclose receipt of this property to his trustee.

In January 2022, Mr Machin transferred this inheritance into a bank account held in the name of a family member, for which he was a co-signatory. 

Between 1 February 2022 and 27 April 2022, Mr Machin transferred a total of $84,700 from that account into other bank accounts.

The court heard a significant amount of time had passed between Mr Machin receiving and dealing with the funds and notifying the registered trustee, the amount of money involved in the offending was substantial, and Mr Machin's self-reported motivation for offending was to repay 'loan sharks'.

Inspector-General in Bankruptcy and Australian Financial Security Chief Executive, Tim Beresford, said: 

'This sentence acts as both a specific and general deterrence to calculated conduct that undermines confidence in Australia's personal insolvency system. AFSA continues to prioritise harms-based enforcement where deliberate misuse of the system is evident.'

This matter was prosecuted by the Office of the Director of Public Prosecutions (Cth) (CDPP) following an investigation and referral by the Australian Financial Security Authority.

Source: https://www.afsa.gov.au/news/wa-man-sentenced-after-afsa-finds-hidden-assets-bankruptcy