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Bankruptcy and liquidation are often interchanged when discussing solutions for businesses and individuals dealing with a financial crisis. However, these two terms do not have the same meaning. Both may involve insolvency — which is the inability to meet debt obligations — but that is where the similarities end.

What Is Bankruptcy?

Bankruptcy is strictly for individuals and is a legal process that occurs when someone is unable to pay their debts. It is always best to enter into voluntary bankruptcy rather than waiting for the courts to order it. Individuals can petition the court when filing for voluntary bankruptcy. Involuntary bankruptcy occurs when one or more creditors petitions the court and the courts issue a judgement. Creditors must be owed at least $5,000 to file for judgement against individuals. 

It is important to note that if a court issues a judgement against you, it creates a lien on the debtor’s property that does not automatically get dismissed.

When to Choose Bankruptcy

Bankruptcy is a formal legal agreement that can free individuals from the burden of their debts. Whilst opting for bankruptcy provides a solution for those fraught by anxiety from debts that they are unable to repay, there are options to consider before filing.

Individuals can:

  • Reach out to creditors to ask for more time to pay.
  • Work with a financial counsellor who can help organise their finances.

Debt agreements are another option for individuals. They are a formal way to settle debts without going into bankruptcy. Individuals who wish to go this route must meet eligibility requirements. Creditors agree to a set amount of money from the debtor. Once that sum is paid, the debts are considered settled. 

Note that there are consequences to debt agreements. They remain on your credit report for five years or more, and your name stays on the National Personal Insolvency Index for five years or more.

What Is Liquidation?

Liquidation is the insolvency process available to companies unable to pay their debts. It also is the only way for businesses to legally wind up and cease operations.

As with bankruptcy, liquidation is either voluntary or involuntary. Voluntary liquidation can be initiated by a company’s shareholders or its members. If a creditor files a petition to recover monies owed, liquidation can be court-ordered.

Liquidation is the right decision if companies:

  • Cannot repay debts to their creditors
  • Cannot meet obligations to the Australian Tax Office (ATO)
  • Are too small to engage in Voluntary Administration
  • Have limited assets that would allow them to continue conducting business

Once the liquidation process begins, a liquidator will either be selected by the company (voluntary liquidation) or appointed by the courts (involuntary liquidation). The liquidator takes control of all assets and performs a detailed investigation into why the company failed. A final report is issued to the Australian Securities and Investments Commission (ASIC) once the liquidator finishes the enquiry.

Seeking Help from the Professionals

If you have made the decision to file for bankruptcy or liquidate your business, trust the professionals to guide you through the process. We have more than 30 years of experience assisting clients throughout Australia about insolvency, bankruptcy, and debt management.

The Australian economy is affected by several soft factors that can push a business toward bankruptcy. Interruptions in global trade due to COVID-19 and record-high unemployment rates are all driving forces.

Small businesses were hit especially hard during the first two quarters of the fiscal year, and the hurting does not seem to be ending anytime soon. Even with government schemes in place to assist, no industry sector is spared, and no company is immune to financial distress.

Follow the Signs

There are warning signs of impending financial collapse if immediate steps are not taken to set things back on track. Business owners who pay attention to these cautionary indicators often can right the ship before it is too far off-course to be saved.

1. You are losing clients/customers

It is perfectly normal to cycle through clients from one year to another, depending on the nature of your product or service. An ongoing decline in sales without the potential for replacement of lost revenue is a sign it may be time to hire a financial advisor to strategise.

2. You are losing your best talent

Employee turnover eats into any business’s budget. Searching for suitable replacements, onboarding, and training new hires can be time-consuming and costly. It takes the average Australian company 39.2 days to fill vacant roles. One-off staff departures are normal and not a sign of trouble. But when your best and brightest start dashing toward the exit at once, it is time to address the underlying issues.

3. You have a cash flow shortage

Cash flow shortages are somewhat normal, especially for small businesses. Clients that are slow to pay and tightened lending criteria contribute to this issue. If this is an ongoing problem, it is time to take action to prevent it from winding down your business for good.

4. Your expenses are escalating

Spending money faster than you earn it is never a wise financial strategy, yet it is an issue with which many businesses struggle. If your business is operating in the red more than the black, it is time to get brutal about trimming expenses. Working with a financial advisor who specialises in business insolvency can help.

Trading While Insolvent

Unlike the other warning signs, trading while insolvent is a final cry for help for any business. The practice also happens to be illegal, which can open a whole new can of worms for businesses already struggling financially. If matters have gotten to this level of seriousness, your business is in immediate need of help from a financial advisor skilled in financial insolvency. Getting the right advisor on board quickly can mean the difference between your business failing or restructuring and rebuilding.

The Bottom Line

While not all of these signs mean a business is headed toward Insolvency, they are common indicators of financial struggle that should never be ignored. The knowledgeable team at Doug Constable Group can help get your business back on solid footing. Reach out today to schedule a no-obligation consultation.

I am a professional business consultant with over 40 years of experience helping businesses across most sectors to manage the complexities of bankruptcy and insolvency when there are no alternative options. I am more than a little disgruntled that the bill to reduce the bankruptcy exclusion period from three (3) years down to one (1) year has been conspicuously ignored since 2016.

Of course, one of the key questions around this entire bill proposal is: Will this really reduce economic barriers and improve economic growth? In my opinion, it will! Of course, my opinion is open to conjecture. Will reducing the period to one year suit everyone’s situation? Most likely, not! Of course, we need to address how this reduction would potentially affect the permanent records of bankruptcy in the National Personal Insolvency Index, employment, travel, et al.! Nor is it responsible to ignore the complexities within the legislation. I have no doubt that as you are reading this, you will be thinking of various other key points for and against the proposed change. However, taking all aspects of the debate into account, we as a nation need to reassess the ‘one-size-fits-all’ three-year exclusion period, and in particular, evaluate how this then impacts employment, innovation, entrepreneurship, et al.

I am sure most of us can recall that in April 2016, the Australian Federal Government announced three major insolvency law reform proposals in its Improving Bankruptcy and Insolvency Laws Proposal Paper (‘The Proposal Paper’). On October 19, 2017, the Bankruptcy Amendment Enterprise Incentives Bill, 2017 (‘The Bill’) was introduced in the Senate. The Bill was for the Bankruptcy Amendment (‘Enterprise Incentives Act, 2017’), which means if the Bill were enacted, it would result in the amendment of the Bankruptcy Act, 1966.

Among the proposed changes in the Proposal Paper was the reduction of the default bankruptcy period from three (3) years down to one (1) year in the event that ‘no offence has been committed’. In the event that bankruptcy is reduced to one year, it is proposed that this action will:

  1. Retain the bankruptcy trustee’s ability to object to discharge, and instead, to extend the bankruptcy period to eight (8) years.
  2. Retain the permanent record of bankruptcy in the National Personal Insolvency Index.
  3. In consultation with relevant industry and licensing associations, align licensing and industry restrictions with the reduced one-year default bankruptcy period.
  4. Reduce the current restrictions on a bankruptee’s ability to obtain credit or undertake overseas travel to one year, subject to any extension due to misconduct.
  5. Impose a continuing obligation on the bankruptee to assist in the proper administration of their bankruptcy, even after discharge.
  6. Retain the bankruptee’s obligation to pay income contributions for three years, regardless of the one-year discharge, with the possibility of income contributions to be extended to five (5) or eight (8) years.

Not only would this legislation be massively beneficial in assisting new businesses to drive innovation and entrepreneurship, it would ease the strain on trustees and the AFSA, because it is predicted that there will be a surge in insolvencies due to the economic impacts of COVID-19.

As a fellow Australian and businessperson, please take just 30 seconds of your time to sign the petition (via clicking the link below) to urge the Federal Government to urgently prioritise the proposed Bill. At the very least, there needs to be an imminent amendment to the legislation, with a clause that states that each case will be assessed based on its individual circumstances. Once an application has been assessed, it will be categorised as either a one (1) or three (3)-year exclusion period, with individually evaluated restrictions.

It is our belief that this is an extremely important priority given our current business environment, which independent Australian economists have predicted will be a protracted and severe recession due to COVID-19. It goes without saying that if there is a massive spike in bankruptcies and insolvencies, this will (without question!) have an enormous negative impact across the country, with dire enduring impacts on both individual Australians and the Australian economy at large. There are a colossal number of businesses across all sectors within Australia who are already remarkably close to the wire. So, the time to act is NOW! The legislated change needs to be urgently prioritised for the sake of countless Australians who’re doing it very tough!

Thank you.
Doug Constable.


Albert Einstein once suggested, ‘We cannot solve our problems with the same thinking we used when we created them’. Yet, this is exactly what we see from some clients during a financial crisis. They share their stories and wait for our advice. Often, instead of following the advice, they repeat the same mistakes.

Ignoring the root of a problem is a recipe for disaster. When clients choose to go about their day-to-day lives without addressing the origin of the problem, they create a vicious cycle that they are doomed to repeat. It may take weeks or months, but rest assured, without learning from past mistakes and taking corrective actions, the result will be the same. We will be sitting across from them in our office again, hearing their latest story of financial struggle. Many times they have been drip-feeding creditors. In reality, they are sending good money after bad. They are just delaying the inevitable.

It does not have to be this way. The cost of waiting until you are actively fighting a financial fire is high. Preparing for and preventing damage to your financial affairs is a better alternative to engaging in damage control. Moving to a ‘Plan B’ scenario has been almost always less effective and more expensive.

A perfect example of the cost of switching to a Plan B is bankruptcy. Entering bankruptcy before creditors place defaults against you is advisable. Down the track, you can make an offer to your creditors. If they accept, your bankruptcy is annulled. Your bankruptcy status is removed, and all debts are considered settled. This preserves a clean credit file and all the advantages that come with it when borrowing in the future.

Conversely, if you wait until creditors place defaults against you, the option of annulling your bankruptcy is still there, but all defaults remain on your file even after debts are settled. It will damage your ability to qualify for credit.

With company insolvency, the consequences are dire. Not only can waiting create a bad credit rating, but it also ensures more damage is done to your professional and commercial relationships. You run the risk of creditors reporting your company for insolvent trading if you delay settling your debts. Creditors are more likely to be understanding if you are upfront about financial difficulties and work toward settling them quickly.

If you think your financial circumstances are spiralling out of control, call us sooner rather than later to arrange an informal chat. With 32 years of experience, we can help work through the issue and get those financial fires out for good. It could be one of the most cost-effective things you do.


 IT’S TIME WE SHIFTED OUR THINKING ABOUT BANKRUPTCY 

The Coronavirus pandemic has left the global economy teetering. Despite the efforts of governments to provide income support, such as JobKeeper payments, large-scale layoffs are likely. Shifts in consumer behaviour, driven by necessity towards online shopping platforms, are forecasted to crystalise and become the new normal. This heralds doom for many bricks-and-mortar businesses without the capital to inject into digitisation or drop-shipping distribution models. As recurring shockwaves start to ripple throughout each industry, the personal impacts of the global downturn will start to surface. 

Recent changes benefit many, but not all 

On 25th March this year, the Federal Government instituted changes to bankruptcy laws offering temporary relief and protection to people in financial difficulty. Clearly, the government foresees a wave of debt problems coming and seeks to minimise the damage. Yet despite the increase threshold for bankruptcy notices from $5,000 to $20,000, one only need cite Australia’s status as the holder of the world’s second-largest household debts to know many will benefit little from this change. 

The personal toll of economic downturn 

In a recent publication citing the mental health ramifications of COVID-19, The Black Dog Institute cited the unemployed and casualised workforce as being particularly vulnerable to depression and anxiety. It seems only logical to place small business owners in this group as well. Collectively, the enhanced financial insecurity caused by economy-wide stoppages in commercial activity, places them at a much higher risk of experiencing unbearable financial stress, resulting in mental illness. 

Dealing with wrong thinking 

Much like mental illness, bankruptcy carries a stigma that often prevents people seeking help. Mounting fears, shame, withdrawal and avoidance – all ordinary symptoms of depression and anxiety – become the daily mental diet of a person struggling under severe financial pressures. And since our culture, rightly or wrongly, assumes that an individual’s financial situation is entirely the product of their own behaviour, those suffering financial stress are more likely to turn to toxic forms of mental positivity rather than pursue available avenues which can restore their financial stability and mental health 


A majority of small businesses fail within the first five years. A recent study attributed 82 per cent of those failures to poor cash flow management. It is a grim statistic, one that businesses can avoid with the right attention to financial detail.

Bookkeeping is about more than sending out invoices to customers and reconciling your business’s bank statements. It is a comprehensive strategy that involves:

  • Developing a budget – As a business grows, there is a fine line between funding and supporting the growth and being conservative with spending. Developing a minimum viable budget will help get your company through lean times and prosperous times.
  • Protecting your credit – When businesses start to struggle, the first move to preserve cash flow is almost always delaying payment of bills. Doing this too long will result in a major ding to your credit.
  • Managing inventory – Failure to account for and maintain adequate inventory to perform your basic services for clients will eventually negatively impact cash flow. Ordering items you already have in stock or forgetting which parts you used as part of a service to one of your customers are examples of how failure to manage inventory can hit your bottom line hard.
  • Maintaining adequate cash reserves – If the COVID-19 pandemic has taught us anything, it is to be prepared for unexpected and unpredictable disruptions to our businesses. An inability to manage a financial downturn can make or break a business.

Turning a Business Around

Too many businesses, especially small businesses, try to do their own bookkeeping. The problem is, they get so caught up in doing their job that they forget to monitor the business. A perfect example is a plumber who has worked 14-hour days and when he finally sits down to do his billing, forgets which parts he used or how many hours he was at a job site. He misses out on charging adequately for his work. The failure to accurately track inventory and time can eat away at a profit which is a recipe for disaster. This is where a good bookkeeping system can help.

I always recommend working with an outside bookkeeper. A good bookkeeper manages a business’s accounting system. If you decide to work with an outside bookkeeper, it is best to find one that provides the following:

  • Daily invoicing
    Invoices should be issued for any work performed at the end of each day. It prevents the failure to charge adequately for products used and billable hours. Daily invoicing also ensures there is ample money to pay the required weekly GST.
  • Weekly reports
    Bookkeepers worth their salt will agree to provide weekly reports to their clients. If they refuse, find another bookkeeper. Having access to a weekly report keeps businesses from quoting too low on their services and ensuring they turn a profit.

So many tradespeople are failing to make wages when in business for themselves. Having an experienced bookkeeper in your corner is often the difference between success and failure.


Going Bankrupt or in Liquidation: Tips for Choosing the Right Advisor

Going from bedrock to bankrupt can be a scary experience.

When asking creditors for more time to pay, negotiating flexible payment arrangements, or offering smaller payments to settle the debt do not work, bankruptcy is the final solution. Generally, it is advisable for individuals and businesses to voluntarily file for bankruptcy or liquidation instead of waiting for creditors to seek permission from the courts to order you bankrupt.

Having the right advisor to help you navigate through bankruptcy or liquidation is an important step in the process. Here are four options debtors can choose from.

1. Financial counsellors

Financial counsellors are recommended by the Australian Financial Security Authority (AFSA) as a resource for dealing with unmanageable debt. They offer confidential and free advice about options for sorting through mounting debt. Best of all, they are independent and will work toward achieving your best interests, not that of creditors. However, very few will actually walk you through to the whole process of Bankruptcy.

2. Solicitors

Solicitors are great with legal matters but may not be familiar with accounting and insolvency and helping with the ongoing information that may be required. Debtors who choose this option should locate a solicitor who specialises in bankruptcy and liquidation the difficulty being they also work for trustees and liquidators who provide the majority of their work. Also, they tend to refer you to the Trustees that they get work from, not necessarily the one that will do the best job for you. 

3. Accountants

Accountants can help determine if there are other financial options before claiming bankruptcy. Some accountants focus on liquidation and bankruptcy can lead you through the process if you decide to proceed. Many will further refer clients to a registered trustee that is in their discussion group. In Australia the average accountant has 3 clients per year facing insolvency normally they don’t have a lot of experience in dealing with the complexities of Insolvency.

4. Private trustees

Private trustees are the preferred option when claiming bankruptcy. Creditors can nominate trustees, but I recommend avoiding this at all costs. When creditors appoint, the trustee is there with the creditor’s interests in mind and may not be impartial. Creditor-appointed trustees can be very aggressive and may not offer the best solutions, so it is best to avoid going this route.

5. Insolvency Advisors

Good Advisors have a team of accountants and solicitors they can refer to they will also have a panel of trustees and liquidators. They can help choose one that fits your needs. My clients are provided with three to four independent trustees and liquidators to choose from. There is an emotional component to bankruptcy, and good trustees recognise and understand that aspect of the process. 

Over the years, I have dealt with a large number of trustees. Whether you go with a private or government trustee, find one that you can talk to. I have found The Government Trustee AFSA quite good to deal with. The majority of my Bankruptcy clients would go to them. With Liquidations we need to use a Registered Liquidator

Keep in mind a trustee should be there for you as well, not just the creditors. They help draw a line in the sand and set you on the right course toward financial recovery. When a letter comes out requesting more information from the trustee, answering it quickly is always the best approach. Be certain to answer the inquiry completely and satisfactorily to reduce the likelihood of complicating the process. This is where someone with experience is important to guide you through the entire process.

Yes, I am an Advisor, I work for you through the whole process, I have been through it personally, I use my 30 years’ experience to protect your interests. I have an idea of the emotions you are facing. It doesn’t need to be the end. Using the experience to build the future is the most important thing.


 A business owner under external administration – already at wit’s end, buffeted by bouts of arguments with former business partners and spouses, and suffering devastating impacts to self-esteem – gets hit by a wave of intrusive phone-calls, threatening letters, and sharply worded emails. 

The practices of liquidators when dealing with businesses, in particular their treatment of directors, has recently been put under the spotlight by an Ombudsman-led inquiry. What it revealed shows how commonplace industry professionals engage in toxic behaviour leading to terrible outcomes, compounding the financial damage of insolvency. 

Dodgy Practices in the Cross-hairs 

As the appointed agent of creditors seeking restitution for unpaid debts, liquidators and administrators owe an obligation to obtain the best possible outcome for their client. Being a ‘business’ themselves, they adopt a ‘results oriented’ approach and since they take on the liability of the insolvent company, are highly motivated to extract the maximum possible capital in the shortest possible time. 

While governed by ASIC regulations and (supposedly) subjected to strict oversight, their profession has become renowned for engaging in practices that can only be labeled as ‘dodgy’. To make matters worse, there is little within current industry guidelines to prevent liquidators and administrators from continuing on their destructive path. 

Copping the Mushroom Treatment 

Often, a business will enter voluntary administration, either due to a lack of funds to contest a legal battle, or in an effort to collaborate with creditors to get a fair outcome. Ideally, during this stage, the relationship between the administrator and directors will be collaborative and consultative. 

Unfortunately, in many cases, the opposite is true. Businesses are frequently steamrolled into liquidation with little or no consultation, and the relationship between parties rapidly deteriorates. During the process of liquidation, there is no obligation to consult or keep directors informed. 

When Communication Breaks Down 

When liquidators do engage with directors, communication is at times marked by insensitivity and hostility. Demands for rapid delivery of information, failure to explain complex processes, and an overall disregard marks interaction. 

Since liquidators report solely to creditors, major decisions can be made and advanced without a directors’ knowledge – however their compliance and responses will be demanded. In the pursuit of executing their role as relationships become intractable, liquidators then turn to bullying tactics and borderline harassment. 

Unresponsive, Reactive Oversight 

ASIC is tasked with providing guidelines to liquidators and offering remedies to complainants who feel a liquidator is in breach. Given the already lax environment liquidators operate in, ASIC’s approach to their oversight is both minimal and entirely reactive. 

ASIC has been criticised for its lack of responsiveness to complains about liquidators and administrators behaviour. They are generally resource-based and too slow to get on top of the problem, meaning they’re forced to pick their battles: the ones that get the biggest headlines. 

What’s Really at Stake? 

When faced with winding-up a business, directors confront a world defined by loss, both psychological and financial. Deepening depression, followed by suicidal thinking, so sadly becomes the daily mental diet of small business directors when a company is placed in external administration. 

ASIC needs to get better at reining-in dodgy liquidators and administrators, by bolstering its oversight and responsiveness to complaints, and by reforming requirements to provide more consultation and involvement to directors. 

Australia has just entered its first recession in nearly 30 years. As the COVID-19 economic downturn deepens, increasing numbers of people will find the business they’ve poured everything into can no longer survive. It’s unconscionable to think that through the actions of liquidators, their own lives should become unbearable as well. 


4 Advantages to a 12-Month Bankruptcy Discharge Period

Insolvency laws in Australia were a hot topic during Prime Minister Malcolm Turnbull’s three years in office. Affectionately referred to as the “free to fail” movement, Turnbull advocated for a reduction in the country’s bankruptcy discharge period from three years to one.

It is not the only time the issue has taken the forefront in Australia, which is known for having some of the most punitive bankruptcy regimes in the world. Lowering the discharge period was previously debated in the legislature several times without passage.

The Bankruptcy Act of 1966 outlines the provisions for debtors to file for bankruptcy. During the COVID-19 pandemic, provisional changes to the law were made. The temporary debt protection period was extended from 21 days to six months, and recovery action by unsecured creditors is prohibited for six months.

Now is an opportune time for the government to re-examine the discharge period as the global economy works hard to recover from the effects of the pandemic. There are several advantages to adjusting the period downward from three years to one.

1. It can stimulate the economy

Reducing the insolvency period from three years to one year can encourage entrepreneurial activity and reduce the stigma associated with bankruptcy. When an individual is in bankruptcy, it forces them into an exclusionary period, during which time they are extremely limited in business activities. They cannot act as a company director and are restricted in their access to finance, employment opportunities and the ability to travel overseas. Bankrupt individuals who are this severely restricted from what is considered routine business activity will have little opportunity to stimulate the economy through the creation of new companies and jobs.

2. It can get people back into the workforce quicker

Bankruptcy usually does not affect an individual’s current employment situation. However, it can count as a strike against them when applying for certain jobs in private industry. While it is illegal for a government agency to refuse to hire someone who has filed for bankruptcy or fire a current employee who files, the private sector is not subject to the same rules. Private employers are permitted to weigh a job applicant’s bankruptcy status as part of the hiring process, especially if the person would be responsible for company finances as part of their job duties.

3. It can remove segmentation associated with bankruptcy 

Segmentation affects an individual’s credit by associating them with a higher risk to lenders. In doing so, the vicious cycle of debt could continue by subjecting these borrowers to riskier interest rates and higher-cost credit options.

4. It can recognize a no-fault bankruptcy status

Some people end up in bankruptcy through no fault of their own. Job loss or mounting medical bills for an unexpected illness or injury can quickly push someone beyond their financial means. Reducing the insolvency period would help people in this situation to recover more quickly.

One of the biggest arguments against lowering the discharge period is that it will result in volume increases for new bankruptcy claims. The Australian Financial Security Authority (AFSA) and private trustees can handle the expected volume increase in bankruptcy filings, so that should not be used as an excuse to delay further action.


The Coronavirus pandemic has left the global economy teetering. Despite the efforts of governments to provide income support, such as JobKeeper payments, large-scale layoffs are likely. Shifts in consumer behaviour, driven by necessity towards online shopping platforms, are forecasted to crystalise and become the new normal. This heralds doom for many bricks-and-mortar businesses without the capital to inject into digitisation or drop-shipping distribution models. As recurring shockwaves start to ripple throughout each industry, the personal impacts of the global downturn will start to surface.

Recent changes benefit many, but not all

On 25th March this year, the Federal Government instituted changes to bankruptcy laws offering temporary relief and protection to people in financial difficulty. Clearly, the government foresees a wave of debt problems coming and seeks to minimise the damage. Yet despite the increase threshold for bankruptcy notices from $5,000 to $20,000, one only need cite Australia’s status as the holder of the world’s second-largest household debts to know many will benefit little from this change.

The personal toll of economic downturn

In a recent publication citing the mental health ramifications of COVID-19, The Black Dog Institute cited the unemployed and casualised workforce as being particularly vulnerable to depression and anxiety. It seems only logical to place small business owners in this group as well. Collectively, the enhanced financial insecurity caused by economy-wide stoppages in commercial activity, places them at a much higher risk of experiencing unbearable financial stress, resulting in mental illness.

Dealing with wrong thinking

Much like mental illness, bankruptcy carries a stigma that often prevents people seeking help. Mounting fears, shame, withdrawal and avoidance – all ordinary symptoms of depression and anxiety – become the daily mental diet of a person struggling under severe financial pressures. And since our culture, rightly or wrongly, assumes that an individual’s financial situation is entirely the product of their own behaviour, those suffering financial stress are more likely to turn to toxic forms of mental positivity rather than pursue available avenues which can restore their financial stability and mental health.

It’s time to lift the stigma on Bankruptcy for good

The stigma of Bankruptcy is the hangover of the ancient (and barbaric) practice of imprisoning debtors unable to repay their creditors. To this day, the aura that creditors hold supreme, unlimited power to deprive an individual of all their freedom and property persists. While support service websites encourage dialogue about financial and mental health; simply do an internet search of ‘mental health’ and ‘debt’ – you won’t find a single bank website addressing the topic.

The result is a stifling silence about the important rehabilitating role Bankruptcy plays. Bankruptcy laws use the word ‘rehabilitation’ to describe the process of restoring a person’s right to property ownership and full social participation. Though while it isn’t the express purpose of Bankruptcy to restore a person’s well-being, in effect, that is what it does. The fresh start offered through bankruptcy isn’t simply a means for renewed financial stability, it provides those experiencing extreme stress a rational pathway towards renewing personal wellbeing.person’s well-being, in effect, that is what it does. The fresh start offered through bankruptcy isn’t simply a means for renewed financial stability, it provides those experiencing extreme stress a rational pathway towards renewing personal wellbeing.

At Doug Constable Group, we’ve long held the view that bankruptcy isn’t just about debts or property – it’s about people. It’s vital that intuitions and professionals working closely with people experiencing financial stress increase their awareness of the enormous psychological stresses facing financial

challenges can bring. And in doing so, work towards removing the ‘Mark of Cain’ attitude surrounding bankruptcy.

Much like the hand-sanitising and social-distancing we’ve all conscientiously practiced – it may save lives.