AFSA unveils 2026–27 priorities amid rising insolvencies

In its review, the government agency AFSA's primary focus has remained on maintaining confidence in regulated systems amid global uncertainty, cost-of-living pressures, and reduced financial resilience among some Australians.

AFSA highlighted that personal insolvencies increased during 2025–26, driven by sustained fiscal strain on Australian families and the small business sector, despite total volumes remaining significantly below the historical benchmark of 25,000 cases.

Statistics revealed an escalating level of financial exposure within specific demographics, notably including youth, tenants, and individuals employed in the building and industrial sectors.

Concurrently, the growing complexities of the credit landscape underscored the need for robust oversight, reliable data, and greater institutional co-operation.

In fact, the quarterly personal insolvency statistics showed that in the 2026 March quarter, 1,749 cases were bankruptcies, 1,356 were debt agreements, 50 were personal insolvency agreements, and six were insolvent deceased estates.

Speaking to Accounting Times, chief executive Tim Beresford discussed the rise in insolvencies.

“Insolvencies are increasing from historically low levels but remain well below the 37,000 recorded in 2009 –10 following the Global Financial Crisis,” Beresford said.

“Personal insolvency numbers continue to be moderated by low unemployment and changes in the way creditors and debtors are managing financial difficulty.”

Furthermore, AFSA debtor demographics indicated that a typical person entering bankruptcy was likely to be a 44-year-old male working in construction and renting.

In response, AFSA focused on the harms that posed the most significant risk to system integrity.

The agency strengthened oversight of insolvency proposals, practitioner conduct and debt agreements, and specifically alluded to taking decisive action in significant matters such as the bankruptcy case regarding Hartnett v Inspector-General in Bankruptcy & Ors, and David John Machin, who was sentenced to jail after AFSA discovered he had failed to disclose an inheritance to registered trustees and transferred funds after filing his bankruptcy petition.

AFSA also pointed out that the agency had improved the quality of the Personal Property Securities Register through a major clear-up program that removed more than 200,000 outdated registrations.

Reflecting on the year, Beresford commemorated fellow staff members and industry professionals, recognising their consistent support for the agency.

“On behalf of AFSA, I would like to thank our staff, regulated entities and practitioners, industry partners, financial counsellors, consumer advocates, government colleagues, international partners and stakeholders across Australia for your continued engagement and support,” Beresford said.

Looking towards the year ahead, AFSA released its 2026–27 Regulatory Action Statement and identified three priority harms:

Manipulation of personal insolvency proposals

AFSA identified the use of personal insolvency proposals to conceal wealth, resulting in unfair outcomes for creditors and undermining confidence in the process.

Their key focus is actively monitoring and intervening in inadequate investigations by practitioners into a debtor’s financial position, and reporting to creditors on unclear, incomplete, or inaccurate reporting, and on inappropriate or non-compliant conduct during creditor meetings.

The proposed outcome is to ensure that practitioners undertake thorough, evidence-based investigations; improve the quality, accuracy, and transparency of information provided to creditors so they can make informed decisions, including voting; and ensure that all parties engage in creditor meetings in an ethical, good-faith manner.

Harmful debt agreement practices

AFSA noted the harmful process of practices that lead to unaffordable debt agreements, poor or incomplete advice, and uninformed decision making.

The agency outlined a key focus on debt agreements that are unaffordable, contain unrealistic budgets and are not sustainable, along with insufficient and poor quality of advice to debtors, including about the consequences of debt agreements, available alternatives, and also excessive or poorly structured Registered Debt Agreement Administrator (RDAA) fees, including total costs over the life of the agreement.

For the year ahead, AFSA outlined that proposed outcomes regarding this harm would be ensuring debt agreements are affordable, sustainable, and based on accurate financial assessments, improving the quality, transparency and completeness of information and advice provided to debtors, supporting informed decision making by debtors and the Official Receiver, and promoting fair and appropriate fee structures that align with the outcomes delivered.

Misuse of the Personal Property Securities Register

AFSA recognised that expired, invalid, or improper PPSR registrations may restrict access to credit and can cause harm to individuals and businesses, which constitutes misuse.

The prominent focus for the year ahead was actively monitoring and addressing the inability to remove invalid registrations and the misuse of the PPSR through registrations that are disingenuous, fraudulent, frivolous, vexatious, offensive, against the public interest, or incorrectly administered.

The key outcomes of addressing this harm included ensuring the lawful, accurate, and proper use of the PPSR; ensuring registrations reflect genuine and enforceable security interests; reducing unnecessary barriers to credit and commercial activity; and strengthening confidence in the PPSR as a trusted public register.