“The Struggle is Real” by Tina Zawila

I recently received Worrells (Solvency and Forensic Accountants) Insolvency Report for 2014-15 and I have to say it made for interesting reading.  The report aims to build a snapshot of the Australian Insolvency Market, it’s emerging trends and the drivers that influence the marketplace.

Generally, when most of us think of “bankruptcy” or “insolvency” we think of “big businesses that have gone under”, however, the reality is many individuals face personal insolvency, and most of these were “non-business related”. 

In 2014-15 there were just over 24,000 non-business related personal insolvency administrations and only 4,700 business related debts.   This is an 84/16 split.

So clearly, it’s not just failed businesses that are leading to personal insolvency. 

One of the main causes of personal insolvency is reported as “non-business related unemployment/loss of income”.   The report also noted that many people attributed “excessive use of credit” as the cause of their insolvency.

So it seems that the leading cause of personal insolvency is high levels of debt that cannot be met if you fall on hard times and either lose your job or are forced into a lower-paid position.  Unfortunately in our local community we have seen examples of this recently.

If you find yourself facing difficult financial circumstances, the most important thing to do is to seek advice and support as soon as possible.  You are not alone.  A professional financial advisor can confidentially review your position and advise on the various options available to you. 

Insolvency is a measure of last resort.  The law exists to assist in addressing impossible financial obligations in a way that is fair and transparent.   

Of course, the best cure is prevention.  So take the time to review your personal financial position regularly, avoid increasing your debt position to acquire depreciating assets, and make sure you are living within your means.

If you need help with your personal finances, call our professional team today on 4972 1300.  We are here to help.