Being an insolvency practitioner (or an “IP”) can certainly have some pros and cons.  During the post COVID years, which I consider to be FY21 & FY22, being an IP felt like being the ugly duckling!. IP’s were working in the shadows, sometimes referred to as the dark side of accounting, while various State & Federal Governments were seemingly handing out money left, right and centre to anybody that had an ABN, and the countries primary creditor – the ATO – also put it’s cue in the rack and halted all serious debt collection activity , resulting in record low insolvency numbers.  This was not music to the humble IP’s ears!     

But as the saying (kind of) goes, what goes down, must eventually go up…. Or the “insolvency cliff” as the media used to say. 

Hence, the tide turned, and for the last 2 years, the insolvency numbers have clawed their way back up, and being an IP has dare I say it, become sexy again!

Well, maybe that is a stretch, but anyway, onto the numbers, Table 1 below provides a summary of corporate insolvency numbers up to 30 March each year for the past 5 years, to show the increasing popularity of the IP.

ASIC – Corporate Insolvency

Table 1: The first time a Company enters external administration or has a controller appointed.

Note 1: Base level is the average of financial years FY17, 18 & 19.

On 26 May 2025, ASIC released ASIC Corporate Insolvency Update - Issue 35 | ASIC which  reported that 10,880 companies entered external administration during the first nine months of the 2024–25 FY, up 40% from the 7,748 companies recorded for the same period in 2023–24!

Meanwhile, Small Business Restructuring (SBR) appointments under Part 5.3B of the Corporations Act continue to increase dramatically - up more than 200% to 2,217 appointments for the first nine months of the 2024–25 financial year, compared to 878 appointments for the same period in 2023–24.  These now account for 20% of companies currently entering external administration! (Side note – have a read of our other Blogs on this topic – the SBR has developed into a great mechanism to save viable businesses!)

The increased use of the SBR legislation has provided the IP with another valuable tool to the belt, which offers directors a really viable alternative when dealing with out of control corporate debt – avoiding business closure, and allowing businesses to keep operating and accordingly are actually saving jobs and livelihoods...

This increase should be reviewed in context.  As ASIC explains, as of 30 March 2025 there were 3,504 million registered companies in Australia. While the ratio of companies entering external administration in the 12 months to 30 March 2025 compared to the number registered (0.31%) has increased, the ratio is still well below the prior peaks in the 2011–13 period of around 0.55%, when numbers of companies were much lower.

While the record of number of corporate insolvency appointments will not last forever, I do not see that the numbers will be reducing for the next financial year (or two…).  At least the IP’s will no longer be working in the dark!

AFSA – Personal Insolvency

Let’s now look at the personal side of Insolvency for the same period.

On 29 May 2025, AFSA released personal insolvencies statistics, which show personal insolvency insolvencies recorded a slight drop in March quarter 2025.

Personal insolvencies recorded slight drop in March quarter 2025 | Australian Financial Security Authority

New personal insolvencies across Australia remained stable, recording only a slight drop in the March quarter 2025 compared to the March quarter 2024, according to new statistics released today by AFSA.

Personal insolvencies remain low in number - 11,644 new personal insolvencies in 2023-24, an increase of 17.3% from the previous year but this remains well below the ten-year average of 21,252.

While AFSA has forecast personal insolvencies to rise by 15% to 13,400 in 2024–25. This compares with 21,078 around 5 years ago, in 2019-2020, prior the COVID years.

Notable for the 2025 March quarter, Business related insolvencies represented 28.5% of personal insolvency stats.

Stats don’t lie, generally higher corporate insolvency figures can lead to higher personal insolvency, these debts need to be dealt with some way or another. So it’s important not to bury ones head in the sand…some people are living on a prayer, yep that was pretty bad… but still remains true.

So could the IP be bringing sexy back?? quite possibly, just ask Justin Timberlake…. . Roland’s favourite singer. But I will let you be the judge.

Who said Accounting was boring.

Robson Cotter specialise in both personal and corporate financial distress and insolvency and are well placed to assist anyone with any queries in this area. Contact us today for a no cost and no obligation chat!