iscover AFSA reports spike in personal insolvencies in June quarter
BusinessThe latest figures from the Australian Financial Security Authority indicate that personal insolvencies across Australia have increased 13.1 per cent compared with the same period last year.
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, according to data from the Australian Financial Security Authority (AFSA).
This was a 13.1 per cent increase compared to the same period last year. The June quarter data showed a 17.1 per cent increase in debt agreements and a 9.6 per cent increase in bankruptcies.
NSW recorded the highest number of new personal insolvencies in the quarter at 1,085, followed by Queensland at 944, and Victoria at 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 most prevalent.
AFSA data also indicated that those living in capital city regions entered personal insolvency at a higher rate than their country counterparts in all states except Tasmania.
A third, or 30.4 per cent, of the total personal insolvencies recorded during the quarter related to business.
AFSA chief executive and inspector-general in bankruptcy, Tim Beresford, said the recent data reinforced AFSA’s decision to target harmful debt agreement advice in its 2026–27 Regulatory Action Statement.
“We know the average person entering into a debt agreement is a 34-year-old woman who works in health care or social services and is renting," said Beresford.
“Around half of all debt agreements involve debts of less than $50,000. That's often the equivalent of a couple of credit cards, a personal loan and a handful of Buy Now Pay Later agreements.
Beresford said these figures indicated that many people entering debt agreements are dealing with relatively modest levels of debt and may be particularly vulnerable when seeking help.
“They are trying to do the right thing by their creditors, but too often receive poor or harmful advice, are placed into unsuitable arrangements, or are charged fees that further worsen their financial position," he said.
“That is why monitoring debt agreement providers and advice practices is a key focus of our 2026–27 Regulatory Action Statement.”
Beresford said the June quarter figures highlighted 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," he said.
"Seeking independent advice early can help individuals understand their choices and find a solution that is appropriate for their circumstances.”
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