Personal insolvencies rose 6.2% in the March quarter and nearly a third were business-related.
New data from the Australian Financial Security Authority shows 3,161 personal insolvencies were filed in the March quarter 2026, made up of 1,749 bankruptcies and 1,356 debt agreements. That is up 6.2% from the 2,977 recorded in the same quarter last year. April figures show the pressure continuing, with 1,113 new personal insolvencies recorded during the month, including 333 that were business-related.
New cases rose across every state and territory. New South Wales recorded the highest number at 967, followed by Queensland at 779 and Victoria at 721. Western Australia recorded 248 new cases, South Australia 172, Tasmania 71, the ACT 34 and the Northern Territory 30.
Where it hurts most
Business-related personal insolvencies accounted for 924 of the total March quarter filings, up from 847 in the same period last year. Construction and the other services category, which includes hospitality and personal care, together accounted for more than a third of all business-related insolvencies. Retail, healthcare and transport were also identified as highly vulnerable sectors.
Chris Baskerville, Partner at Jirsch Sutherland and a dual Registered Liquidator and Bankruptcy Trustee, said the pattern of consumer behaviour is feeding directly into those sectors. “Consumers are becoming far more selective about where their money goes. Discretionary spending is under severe pressure, and small businesses are feeling the impact,” he said.
Baskerville described what the firm calls “date-night economics”, the trend of households cutting back on dining out and entertainment, as having intensified. “We’re seeing households strictly prioritise mortgages, rent, utilities, fuel, insurance and groceries,” he said. “That slowdown flows quickly through to cafes, restaurants, retailers, trades and other SMEs already operating on razor-thin margins.”
Personal and business blurring
One of the more concerning trends in the data is the degree to which personal and business financial stress have become difficult to separate. Baskerville said many of the cases the firm is seeing involve small business owners who have been drawing on personal savings and credit cards to keep their businesses running.
“Financial pressure is no longer isolated to business balance sheets, it’s hitting households hard,” he said. “Many of these cases involve small business owners whose personal and business finances have become deeply intertwined, making it increasingly difficult to separate household financial stress from business distress.”
The AFSA data reinforces that picture. Long-term figures show that while business-related personal insolvencies account for less than a third of new cases, they represent 79% of total liabilities. Sole traders owe 75% of those debts to corporate business creditors and 17.4% to government agencies including the ATO.
The age group bearing the most pressure is 30 to 34 year olds, who accounted for the largest share of personal insolvencies in the March quarter. Renters and workers in trades, labour-intensive and construction-related roles are also disproportionately represented in the data, according to AFSA’s 2024-25 demographic analysis.
“These people aren’t necessarily unemployed; many are fully employed but have simply exhausted their financial buffers after several years of compounding rising costs,” Baskerville said.
Seeking help early
Baskerville said the stigma around insolvency is still stopping some people from acting sooner than they should. His message is direct: the formal insolvency system exists precisely for situations like this, and waiting makes options narrower, not wider.
“The worst thing people can do is ignore the problem and hope it goes away. The earlier someone seeks advice, the more options they typically have available,” he said. “Insolvency doesn’t automatically mean failure or end of the road. For thousands of Australians buckling under unsustainable debt, it provides immediate legal protection, caps the crisis, and acts as an immense relief valve for people’s mental health and financial future.”
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