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A bad year for bankruptcies

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/territoryBankruptciesDebt agreementsPersonal insolvency agreementsTotal personal insolvency activity

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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Fact Checked -

This article was reviewed by Property & Personal Finance Writer Nick Bendel before it was published as part of RateCity's Fact Check process.



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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.

What are the Westpac personal loan eligibility criteria?

The process to apply for a personal loan from Westpac is simple and can be done online. To be eligible for a Westpac Bank personal loan, you must meet the eligibility criteria. These include:

  • You should be over 18 years old
  • You must be a permanent resident or hold a valid visa with confirmed employment in Australia
  • You should earn a regular and permanent income of at least $35,000 before taxes

If you feel you meet these eligibility criteria, you can apply for a personal loan with Westpac. With your application form, you’ll also have to submit the following documents:

  • Personal details including name, contact information, and residential address 
  • Proof of identity such as drivers licence or passport details
  • If you’re self-employed, you’ll need a list of assets, savings, investments, and liabilities as well as your most recent tax return information
  • If you’re an employee you’ll need to submit information related to your employment and finances like bank statements and payslips

Westpac Australia personal loans are available for amounts from $4,000 up to $50,000 and loan terms of up to seven years.

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.

How long does it take to get a student personal loan?

Completing an online personal loan application can often take anywhere from 10 minutes to 1 hour. Depending on your lender, processing your personal loan application may take anywhere between 1 and 24 hours. If your personal loan application is approved, you may receive the money in your bank account the following business day, or, in some cases, the same day.

Do student personal loans require security?

While some personal loans can be secured by the value of an asset, such as a car or equity in a property, student personal loans are often unsecured, which typically have higher interest rates.

Some lenders also offer guarantor personal loans to students. These loans have lower interest rates, as a guarantor (usually a relative of the borrower with good credit) will fully or partially guarantee the loan, taking on the financial responsibility if the borrower defaults.

Are there low doc personal loans?

Self-employed borrowers may be eligible for low doc personal loans, which require less documentation in their application process than many other personal loan options.

It’s important to remember that though low doc personal loans may require less paperwork, you may need to provide additional security, or pay a higher interest rate.

Can single mothers get personal loans online?

Many lenders offer online applications for personal loans, which can be convenient for borrowers who have busy lives. If you’re not confident your personal loan application will be approved, you may want to consider contacting the lender by email, live chat, phone, or by visiting a branch, to discuss your situation before applying.

What are the pros and cons of personal loans?

The advantages of personal loans are that they’re easier to obtain than mortgages and usually have lower interest rates than credit cards.

One disadvantage with personal loans is that you have to go through a formal application process, unlike when you borrow money on your credit card. Another disadvantage is that you’ll be charged a higher interest rate than if you borrowed the money as part of a mortgage.

What can I use a bad credit personal loan for?

Generally, bad credit personal loans can be used for the following purposes:

  • Debt consolidation
  • Paying bills
  • Buying vehicles
  • Moving expenses
  • Holidays
  • Weddings
  • Education

Some lenders restrict how their bad credit personal loans can be used as part of their commitment to responsible lending – be sure to check before applying.

Can I get a no credit check personal loan?

Personal loans with no credit checks are available and called ‘payday loans’. These are sometimes used as short-term solutions for cash-strapped Australians. They often carry higher interest rates and fees than regular personal loans, and individuals risk putting themselves into a worsened cycle of debt.

What do single mothers need to apply for a personal loan?

Like other personal loan applicants, single mothers will likely need to provide a few documents to any potential lender, such as personal identification, bank statements (savings, loans, credit cards), proof of address, and proof of income (payslips, tax returns).

Can unemployed single parents get personal loans?

It can be more difficult for unemployed borrowers to successfully apply for a personal loan. Most lenders require borrowers to have a regular income available to cover the cost of loan repayments.

If you’re self-employed, or if less than half of your income comes from Centrelink, you may not be eligible for some personal loan options. Consider contacting the lender before applying.

Should I get a fixed or variable personal loan?

Fixed personal loans keep your interest rate the same for the full loan term, while interest rates on variable personal loans may be raised or lowered during your loan term.

A fixed rate personal loan keeps your repayments consistent, which can help keep your budgeting consistent. You won't have to worry about higher repayments if your rates were to rise. However, on a fixed loan you’ll also potentially miss out on more affordable repayments if variable rates were to fall.