It is no doubt that as a consequence of the 2008-2009 economic crisis, Australia is recording huge increases in the number of people that are forced to seek some kind of insolvency solution. While it would appear that the more traditional option of pursuing full bankruptcy proceedings is still on a worrying rise, debtors are now finding that there are other choices available to them, and in this regard, such alternative solutions would seem a far more tempting for a number of reasons.

Overall, there was a 5.9% increase in the number of bankruptcies that were filed for the year 2008-2009 (according to the statistics published through the ITSA website). This would most certainly attest to the fact that the Australian economy was affected quite markedly from the recession during that one year. However, on the plus side, for the June quarter, there seemed to be a 0.5% decrease in the number of bankruptcies that were petitioned (in comparison to the same quarter the year before) and this may well be indicative of a levelling-out of the number of insolvencies that are likely to be seen in Australia.

On the other hand, as far as insolvency proceedings are concerned, the aforesaid statistics do not even begin to paint the full picture. Whilst a 5.9% increase is worrying in anyone’s book, it is not a patch on the increases that have been realised for Part IX Debt Agreements and Part X Arrangements. These soared by a massive 29.45% and 47.65% respectively, evidencing the underlying effect of the global financial crisis on the economy.

Nevertheless, as with the bankruptcy figures, there have been a fall in the number of people pursuing such remedies in the last quarter of the financial year 2008-2009 that was assessed, showing signs that economic recovery is underway for the current financial year. This is a significant change compared with the same period in 2008. Part IX Debt agreements realised an decrease of 13.53% in the June 2009 quarter, compared with the year before and there was an even bigger difference in the number of Part X Arrangements - at 3.88%.

It remains to be seen whether or not the last quarter’s statistics will be the start of a downward trend in bankruptcy and the Part IX and Part X proceedings for the current financial year. It must be considered that it may be the case that the June quarter period could typically be more quiet that the other quarters.