Personal Insolvency Statistics: Overall steady; but Bankruptcies Down and Debt Agreements Up

ITSA has released the annual summary of personal insolvency statistics for the 2011-12 financial year.  Personal insolvencies for the year were 31,488 which was a small decrease (.14%) on the year prior. The total number of personal insolvencies is made up of three categories and there is a change in the mix.  There were:

• 22,163 new Bankruptcies which was a fall of 4%;
• 8,947 new Debt Agreements (or Part IXs).  That was an increase of 11% – for those unfamiliar with Debt Agreements, they are designed for debtors with a small amount of total debts and a small annual income.  The usual deal in a Debt Agreement is that the debtor agrees to pay back a specific amount per month over a three to five year period.
• 378 Personal Insolvency Agreements (or Part Xs).  That was an increase of .8%.  So PIAs are for higher value or complicated agreements.

So overall, roughly the same number of people are going broke.  The change in the mix is just a reflection of marketing power as there are many Debt Agreement companies that market Debt Agreements heavily, whereas the same can not be said for vanilla bankruptcies.