Almost half of the people who enter personal insolvency in Australia now have a buy now pay later (BNPL) debt, according to the Australian Financial Security Authority (AFSA), the government body that runs bankruptcy. A decade ago it was around 2%. Personal insolvency covers bankruptcy and debt agreements with creditors.
How common is BNPL debt among people in financial trouble?
AFSA Chief Executive Tim Beresford told the Financial Counselling Australia conference on 7 May 2026, "A decade ago, around 2% of debtors entering personal insolvency had a BNPL debt. Today, it's almost half. Among debtors under 29, it's 65%."
He also said BNPL only makes up around 1% of total debts in the personal insolvency system, because transaction values are low, and that its presence is growing.
Who is entering debt agreements?
AFSA's 25 August 2026 release said the average person entering a debt agreement is a 34-year-old woman who works in health care or social services and is renting. Around half of all debt agreements involve debts of less than $50,000, which Mr Beresford described as "often the equivalent of a couple of credit cards, a personal loan and a handful of Buy Now Pay Later agreements."
Are personal insolvencies rising?
Yes. AFSA recorded 3,596 new personal insolvencies in the June quarter 2026, compared with 3,179 in the June quarter 2025, an increase of 13.1%. Debt agreements rose 17.1% and bankruptcies rose 9.6%.
Why are households under pressure?
The Reserve Bank lifted the cash rate target by 0.25 percentage points to 4.60% from 30 September 2026. Consumer sentiment fell to 80.4 in October 2026, which our explainer on consumer sentiment in Australia covers.
Where can you get help?
AFSA says financial counsellors and registered insolvency professionals can review your situation. The National Debt Helpline offers free and confidential help on 1800 007 007, and Money Smart has budgeting tools.
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Sources
Every page below was read on 20 October 2026.
- AFSA, Chief Executive address at the 2026 Financial Counselling Australia Conference, 7 May 2026 (BNPL share of debtors, 2% a decade ago, 65% under 29, 1% of total debts)
- AFSA, Personal insolvencies up 13.1% in June quarter 2026, 25 August 2026 (3,596 and 3,179, debt agreements and bankruptcies, the average debtor, debts under $50,000, the National Debt Helpline and Money Smart)
- Reserve Bank of Australia, Cash rate target (up 0.25 to 4.60%, effective 30 September 2026)
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