AFSA have just released their latest quarter of statistics for the December quarter, and they have indicated a 7.4% increase over the same period in the prior year, that’s a total of 7,578 individual bankruptcies. They have stated that increases were reflected in all Territory’s and States in “year-on-year terms”.

Given that that we increasingly move towards a ‘debt & forget’ approach to funding these numbers are in no way surprising, in fact with 12 month bankruptcies on the horizon it is likely to increase rather than decrease. Nowadays it’s really just a case of give people credit, if they fail then sell off the debt in large swags to a debt buyer/recoverers for a fraction of the original debt and do it all again!

The United Kingdom has already dropped their period to 12 months and the stats published by those with interest in the credit cycle say that the improvement to the economy as a whole has been significant. I suspect that this though is very much predicated on the basis that larger organisations simply build a known level of write off into their product costings and accept a reduction in that level as a windfall gain! This is the new norm and apparently if properly managed will generate higher returns than any real effort to keep write-offs low. Based on my own experience I suspect that it’s a similar sort of logic to the Master’s $200 Million type investment, but who am I to argue!

It will be really interesting to see how this trend is managed should the market become much tighter on credit. When every cent counts, then somehow I suspect it may well return to days of old.

Let’s wait and see.