Significant Increase in Business-Related Personal Insolvencies
In a concerning financial trend, the number of business-related personal insolvencies in December 2025 experienced a significant surge of 38% compared to the previous year. The Australian Financial Security Authority (AFSA) data revealed that 344 individuals who declared personal insolvency were also connected to a business, marking an increase from 249 individuals in the same period in 2024.
Bankruptcies Dominating Personal Insolvencies
Interestingly, bankruptcies have been found to account for over 60% of all personal insolvencies. The rise of such cases suggests that financial pressures stemming from business operations are increasingly impacting individuals’ personal financial health. This is further corroborated by insolvency solutions and business rescue firm Jirsch Sutherland, pointing towards tighter enforcement settings, increased interest rates, and imminent tax obligations as factors exacerbating the situation.
Pattern of Rising Insolvencies
AFSA’s data shows a consistent year-on-year rise in business-related personal insolvencies every December for the past four years. Emma Mos, a partner at insolvency firm Jirsch Sutherland, interprets these figures as a reflection of a broader pattern.
“The December AFSA figures reflect a broader pattern, with personal insolvency increasingly occurring later in the business distress cycle, rather than as an immediate response to new shocks,” Mos said. “This isn’t about sudden failure. What we’re seeing is the personal impact of prolonged business stress. For many business owners, years of pressure lead to personal insolvency as historic liabilities – including tax debts – materialise.”
Increasing Trend of Insolvencies
When comparing year-end figures for December, business-related personal insolvencies rose from 163 in 2022 to 232 in 2023, 249 in 2024, and 344 in 2025. Over this period, the proportion of all personal insolvencies involving someone connected to a business has increased from approximately 27% to over 32%, indicating a structural shift rather than an isolated spike.
Industries Affected by Personal Insolvency
Those entering personal insolvency continue to come from a broad spectrum of industries. These range from construction, retail trade, transport, postal and warehousing, to health care and social assistance, and other services. This diverse range underlines the widespread impact of business stress on personal financial situations across various sectors.
The increasing trend of business-related personal insolvencies is a reminder of the challenging financial landscape many are navigating, with the repercussions of business stressors often trickling down to individuals’ personal financial health. Experts suggest that a comprehensive understanding of financial management and seeking timely professional advice can help mitigate these risks.
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