Financial difficulty does not affect only one type of person.

The Australian Financial Security Authority (AFSA) has released detailed debtor demographic data showing who entered personal insolvency across Australia during the 2024–25 financial year.

The figures provide an important reminder: personal insolvency is not limited to people with extremely high debts or people outside the workforce.

In 2024–25, 12,257 Australians entered personal insolvency, an increase of 5.3% from the previous financial year. Of these, 6,930 entered bankruptcy, 5,093 entered debt agreements and 210 entered Personal Insolvency Agreements.

As a Registered Trustee specialising in personal insolvency and bankruptcy, I believe these statistics are useful because they help move the conversation away from assumptions and towards a clearer understanding of the circumstances in which financial distress can arise.

You can review the original data through AFSA's Debtor Demographics Statistics.

What Do the Latest AFSA Personal Insolvency Statistics Show?

AFSA's debtor demographic data provides information about Australians entering personal insolvency based on factors including age, gender, occupation, employment industry, location and living arrangements.

The 2024–25 data shows that personal insolvency was particularly represented among:

• People in their 30s and early 40s
• Men
• Renters
• Technicians and trades workers
• Labourers
• Managers
• People working in construction
• People working in health care and social assistance
• People working in transport, postal and warehousing

AFSA's profile of a typical person entering bankruptcy was a male renter in NSW, with a median age of 44, working as a technician or trades worker and employed in construction.

The typical person entering a debt agreement was a female renter in NSW, with a median age of 34, working in a community or personal service occupation and employed in health care and social assistance.

These are statistical profiles rather than descriptions of every person who enters insolvency. Individual circumstances can be very different.

If you are unsure what personal insolvency means in practice, my Personal Insolvency Services page explains the broader concept and the options that may be available.

Australians in Their 30s and Early 40s Are Strongly Represented

One of the most notable findings is the age at which many Australians are entering personal insolvency.

People aged 30 to 44 accounted for nearly 40% of new personal insolvencies in 2024–25.

The largest individual age groups included:

• 30–34 years: 14.0%
• 35–39 years: 13.3%
• 25–29 years: 12.7%

The median age of someone entering personal insolvency was around 40.

These are years when many people may be balancing significant financial responsibilities, including housing costs, family expenses, personal borrowing and business commitments.

However, the statistics do not tell us that any single expense causes insolvency.

Personal insolvency usually needs to be understood in the context of a person's entire financial position.

AFSA's State of the Personal Insolvency System 2024–25 provides further information about the financial circumstances of people entering the system.

Younger Australians and Buy Now, Pay Later Debt

AFSA's broader analysis also identified a notable pattern involving Buy Now, Pay Later liabilities.

Across people entering personal insolvency in 2024–25, 48.9% had at least one Buy Now, Pay Later liability.

Among debtors aged 29 or younger, this increased to 65.2%.

This does not mean using Buy Now, Pay Later automatically leads to personal insolvency.

It does show that newer forms of consumer credit form part of the debt profile of many younger Australians experiencing financial difficulty.

Multiple relatively small debts can become difficult to manage when combined with rent, utilities, credit cards, personal loans and everyday household expenses.

The total amount owed is therefore only one part of the picture. Your ability to continue meeting repayments as they become due is equally important.

Men Accounted for the Majority of Personal Insolvencies

AFSA reported that 55.5% of people entering personal insolvency in 2024–25 were male, while 40.8% were female. The remaining group identified as another gender or did not state their gender.

The gender profile also differed between types of personal insolvency.

AFSA's typical bankruptcy profile was male, while its typical debt agreement profile was female.

This highlights why insolvency statistics should be interpreted carefully.

Bankruptcy, debt agreements and Personal Insolvency Agreements operate differently and may apply to people with very different financial circumstances.

For example, bankruptcy is a formal legal process with specific consequences for debts, assets and income. My Bankruptcy Services page explains these consequences in more detail.

Renters Make Up the Largest Housing Group

Housing status is one of the most striking aspects of AFSA's debtor demographic analysis.

Renters represent a substantial majority of people entering personal insolvency, while comparatively few people entering the system own their home outright or have a mortgage.

This does not mean renting causes insolvency.

Rather, the figures can help us understand the asset position of many people experiencing serious financial difficulty.

Whether you own property can significantly affect the consequences of bankruptcy because a trustee may have an interest in certain assets and available equity.

If property is one of your main concerns, read Will I Lose My House If I Go Bankrupt? for a more detailed explanation.

Which Occupations Are Most Represented?

AFSA found that three of the most common occupational groups among people entering personal insolvency were:

1. Technicians and trades workers
2. Labourers
3. Managers

Together, these groups represented more than 38% of personal insolvencies where relevant occupation information was available.

This is an important reminder that being employed does not necessarily protect someone from financial difficulty.

A person may continue earning an income while their financial commitments become increasingly difficult to manage.

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• Reduced working hours
• Illness or injury
• Employment changes
• Business conditions
• Loss of overtime or commissions
• Changes in family circumstances

People considering bankruptcy are often concerned that they will no longer be able to work or keep their income. That is not generally the case.

My guide to What Happens to My Income During Bankruptcy? explains how income and compulsory contributions are treated.

Which Industries Are Most Represented?

The employment industries most commonly represented in AFSA's 2024–25 demographic data included:

• Construction
• Health care and social assistance
• Transport, postal and warehousing

Retail trade was also strongly represented.

Construction is particularly noteworthy because it also appears prominently in AFSA's analysis of business-related personal insolvency.

That does not mean working in one of these industries makes somebody likely to become insolvent.

The figures simply show where people entering personal insolvency reported working at the time their information was collected.

Personal Insolvency Does Not Always Involve Very Large Debts

Another useful finding is the amount people owe when entering personal insolvency.

In 2024–25, 45% of people entering personal insolvency had liabilities below $50,000.

A further 20.9% had liabilities between $50,000 and $100,000.

This means almost two-thirds entered the system with liabilities below $100,000.

These figures challenge the assumption that someone must owe hundreds of thousands of dollars before personal insolvency becomes relevant.

Whether a debt is manageable depends on more than its headline value.

For example, $40,000 of unsecured debt may be manageable for one person but extremely difficult for another depending on:

• Income
• Essential expenses
• Dependants
• Assets
• Interest and repayment obligations
• Other liabilities

The type of debt also matters.

Some debts can be dealt with through bankruptcy while others may remain payable. I explain this in What Debts Are Not Covered by Bankruptcy?.

What Is Causing Australians to Enter Personal Insolvency?

According to AFSA's 2024–25 system analysis, excessive use of credit or excessive borrowing was the most commonly self-reported cause of personal insolvency, accounting for 37.3% of cases.

Other significant self-reported factors included:

• Unemployment
• Business failure
• Relationship breakdown
• Health-related financial stress
• Reduction in personal or family income

These figures should be interpreted carefully.

They are self-reported causes, and financial difficulty often develops because of several overlapping circumstances rather than one single event.

Personal insolvency should not be treated as a judgement about how someone manages money.

Understanding what has changed financially is more useful than assigning blame.

Business-Related Personal Insolvency Has a Significant Financial Impact

Business-related personal insolvencies represented 28.8% of new personal insolvencies in 2024–25.

However, they accounted for 78.8% of total new liabilities.

This difference is significant.

Sole traders, company directors and small business owners can potentially accumulate larger liabilities through:

• Business borrowing
• Tax obligations
• Commercial leases
• Personal guarantees
• Supplier debts
• Business credit facilities
  

Where personal and business liabilities overlap, it is important to identify exactly who owes each debt and whether a personal guarantee or security applies.

My article Bankruptcy for Business Owners: What You Need to Know Before Filing provides further information about how personal bankruptcy can affect business owners.

Personal Insolvencies Have Continued to Increase

AFSA recorded 12,257 new personal insolvencies during 2024–25, representing a 5.3% increase from 2023–24 and the third consecutive annual increase.

However, AFSA also notes that overall volumes remain substantially below pre-COVID levels.

More recent quarterly statistics show that new personal insolvencies have continued to rise.

For the June quarter 2026, AFSA recorded a 13.1% year-on-year increase compared with the June quarter 2025.

It is important to distinguish between the two datasets.

The 2024–25 demographic statistics tell us about characteristics such as age, occupation and living arrangements.

The more recent quarterly statistics tell us about the number of insolvencies, but they do not necessarily tell us that the demographic profile has changed.

You can view the latest figures through AFSA's Quarterly Personal Insolvency Statistics.

What Can We Learn From the AFSA Data?

For me, one of the most important messages is that personal insolvency does not have one single profile.

It affects:

• Employees and business owners
• Younger and older Australians
• Men and women
• People across many occupations
• People with relatively modest debts as well as very substantial liabilities

The statistics also reinforce why it can be useful to seek advice before financial pressure becomes more difficult to manage.

Signs that your financial position may need closer attention can include:

• Missing repayments
• Using new credit to pay existing debts
• Receiving repeated creditor demands
• Falling behind with tax obligations
• Struggling to meet ordinary living expenses and repayments
• No longer seeing a realistic way to repay what you owe

These signs do not automatically mean bankruptcy is appropriate.

Depending on your circumstances, options may include informal negotiations with creditors, hardship arrangements, debt agreements, bankruptcy or a Personal Insolvency Agreement.

AFSA also provides a useful government overview through its comparison of personal insolvency options.

How I Can Help

Statistics tell us what is happening across Australia, but they cannot determine which option is appropriate for one individual.

As a Registered Trustee specialising in personal insolvency and bankruptcy, my role is to understand your circumstances and explain how Australia's insolvency options may apply.

I can help you consider:

• Your debts and creditors
• Income and household commitments
• Assets
• Business liabilities
• Personal guarantees
• Creditor action
• The consequences of bankruptcy
• Personal insolvency alternatives

Financial difficulty can affect people in many different circumstances.

Seeking advice does not commit you to bankruptcy or any other formal insolvency process. It gives you an opportunity to better understand your position and the options that may be available.

If your debts have become difficult to manage, contact Clare Corrigan to arrange a confidential discussion about your circumstances.