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