A bad year for bankruptcies

It was a tough financial year for Australia’s debtors, with the number of personal insolvencies around the country growing over 2017-18 to reach the highest figure in nearly a decade.

In figures released by the Australian Financial Security Authority (AFSA), the number of personal insolvencies across the country rose for the third consecutive year, increasing by 5.6% in 2017–18 compared to 2016–17.

The 31,859 personal insolvencies in 2017–18 was found to be the largest annual number of personal insolvencies since the record of 36,539 set in 2009–10.

Personal insolvencies state by state

Looking at changing personal insolvency numbers state by state:

  • Northern Territory: +14.3% (record annual level)
  • Western Australia: +12.9% (record annual level)
  • Tasmania: +10.2%
  • New South Wales: +7.1%
  • South Australia: +5.1%
  • Queensland: +2.6%
  • ACT: no change
  • Victoria: -1.5%

Personal insolvencies in 2017-18

State/territory Bankruptcies Debt agreements Personal insolvency agreements Total personal insolvency activity
NSW 4604 4464 50 9118
ACT 186 220 2 408
VIC 3066 2622 34 5722
QLD 5013 4160 62 9235
SA 1138 765 21 1924
NT 158 191 3 352
WA 2064 1918 35 4020
TAS 464 332 3 799
Other* 118 162 1 281
TOTAL 16,811 14,834 214 31,859

Source: AFSA

*State/territory “Other” includes records where no address is stated or where the stated address is not in the Australian Statistical Geography Standard (ASGS).

Comparing personal insolvencies by type

AFSA found that in 2017-18:

  • Bankruptcies increased by 3.0%
  • Debt agreements increased by 9.1%
  • Personal insolvency agreements decreased by 12.3%.


The annual rise in bankruptcies from 16,320 in 2016-17 to 16,811 in 2017-18 was found to be the largest since 2008–09 (when there were 27,520 bankruptcies), with the only other rise of 0.2% occurring in 2015–16.

Bankruptcies reached an annual record high of 158 in Northern Territory, following an increase of 31.7%.

Debt agreements

New debt agreements increased for the seventh consecutive year in 2017-18, growing by 14,834 – the highest annual number on record.

Debt agreements increased in 2017–18 compared to 2016–17 in all states and territories, with all states and territories except Tasmania reaching record annual highs. There were 332 debt agreements in Tasmania in 2017–18, just two less than the record level of 334 set in 2012–13.

Personal insolvency agreements

There were only 214 new personal insolvency agreements in 2017–18, down from 244 in 2016–17. Personal insolvency agreements fell to a record annual low in Victoria, decreasing by 33% to just 34.

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Learn more about personal loans

Can you refinance a $5000 personal loan?

Much like home loans, many personal loans can be refinanced. This is where you replace your current personal loan with another personal loan, often from another lender and at a lower interest rate. Switching personal loans may let you enjoy more affordable repayments, or useful features and benefits.

If you have a $5000 personal loan as well as other debts, you may be able to use a debt consolidations personal loan to combine these debts into one, potentially saving you money and simplifying your repayments.

What is a bad credit personal loan?

A bad credit personal loan is a personal loan designed for somebody with a bad credit history. This type of personal loan has higher interest rates than regular personal loans as well as higher fees.

How much can you borrow with a bad credit personal loan?

Borrowers who take out bad credit personal loans don’t just pay higher interest rates than on regular personal loans, they also get loaned less money. Each lender has its own policies and loan limits, but you’ll find it hard to get approved for a bad credit personal loan above $50,000.

Which lenders offer bad credit personal loans?

Several dozen lenders offer bad credit personal loans in Australia. These are generally smaller lenders that aren’t household names.

Can I get guaranteed approval for a bad credit personal loan?

Few, if any, lenders would be willing to give guaranteed approval for a bad credit personal loan. Borrowers with bad credit histories can have more complicated financial circumstances than other borrowers, so lenders will want time to study your application. 

It’s all about risk. When someone applies for a personal loan, the lender evaluates how likely that borrower would be to repay the money. Lenders are more willing to give personal loans to borrowers with good credit than bad credit because there’s a higher likelihood that the personal loan will be repaid. 

So a borrower with good credit is more likely to have a loan approved and to be approved faster, while a borrower with bad credit is less likely to have a loan approved and, if they are approved, may be approved slower.

What causes bad credit ratings/scores?

Failing to repay loans and bills will damage your credit score. So will falling behind on your repayments. Your credit score will also suffer if you apply for credit too often or have credit applications rejected.

How long does it take to get a bad credit personal loan?

In the best-case scenario, an application for a bad credit personal loan can be made within minutes and then be approved within 24 hours. However, if a lender needs more information or needs more time to verify the provided documents, the application process may take longer.

How are credit ratings/scores calculated?

Different credit reporting bodies may use different formulas to calculate credit scores. However, they use the same type of information: credit history and demographic profile.

They’re likely to look at how many credit applications you’ve made, which lender the applications were for, what purpose they were for, how much they were for and your repayment record. They’ll also look at your age and postcode. They’ll also look to see if you’ve had any bankruptcies or other relevant legal judgements against you.

Your score can change if your demographic profile changes or new information is added to your file (such as a new loan application) or existing information is removed from your file (i.e. because it has reached its expiry date).

What is bad credit?

A person is deemed to have ‘bad credit’ when they have a poor history of managing credit and repaying debts.

What is an unsecured bad credit personal loan?

A bad credit personal loan is ‘unsecured’ when the borrower doesn’t offer up an asset, such as a car or jewellery, as collateral or security. Lenders generally charge higher interest rates on unsecured loans than secured loans.

What is debt consolidation?

Debt consolidation is the process of rolling several old debts into one new debt, usually to save money or for the sake of convenience.

What are the pros and cons of bad credit personal loans?

In some instances, bad credit personal loans can help people with bad credit history to consolidate their debts, which can help make it easier for them to clear those debts. This is because the borrower might be able to consolidate several debts with higher interest rates (such as credit card loans) into one single debt with a lower interest rate and potentially fewer fees.

However, this strategy can backfire if the borrower spends the loaned funds instead of using it to repay the new loan. Another disadvantage of bad credit personal loans is that they have higher interest rates than regular personal loans.

What's a credit report?

A credit report is a record of your credit history, which covers your credit enquiries, borrowings and your repayments. The report will include information about any bankruptcies or other relevant legal judgements. It will also include biographical information such as your address, date of birth, driver's licence number and employment history. 

What is a bad credit rating/score?

Credit ratings or credit scores are calculated by credit reporting bodies such as Equifax, Dun & Bradstreet, Experian and the Tasmanian Collection Service. These are separate organisations, so they use different systems.

Equifax gives scores between 0 and 1,200:

  • 833 to 1,200 = Excellent
  • 726 to 823 = Very good
  • 622 to 725 = Good
  • 510 to 621 = Average
  • 509 or less = Below average

Dun & Bradstreet (through the Credit Simple service) gives scores between 0 and 1,000:

  • 800 to 1,000 = High end
  • 700 to 799 = Great
  • 500 to 699 = Average
  • 300 to 499 = Room to improve
  • 299 or less = Low

Experian gives scores between 0 and 999:

  • 961 to 999 = Excellent
  • 881 to 960 = Good
  • 721 to 880 = Fair
  • 561 to 720 = Poor
  • 0 to 560 = Very poor

The Tasmanian Collection Service doesn’t give scores. Instead, it prepares credit reports for credit providers and then lets those providers make their own assessment.