Personal insolvency is a growing issue – are you worried about it?
Managing one's personal finances is always a difficult process, and there are sure to be times when the cash flow isn't going smoothly and the expenses simply pile too high to keep up. If you're going through a period like this, it might be comforting to know that you're not alone. Personal insolvency is a widespread issue, affecting tens of thousands of people throughout Australia and elsewhere.
If you fear that you might soon become one of these cases, it's important to identify the problem early and take steps to prevent it from becoming worse. This requires getting to the bottom of your finances and making intelligent decisions about your future. If you're not equipped to do all of this yourself, that's OK – there are professionals out there who can help.
Personal insolvency in Australia today
When going through money problems, it's easy to feel isolated, like you're the only person in the world who has to endure the struggles that you do. It can be comforting to know that that's not the case. As a matter of fact, there are tens of thousands across Australia who are currently struggling.
Finance data from the Australian Financial Security Authority indicates that in 2015, there were a total of 28,288 personal insolvencies reported nationwide. That's a lot, but the good news is that 28,288 was a record low – the total has been decreasing across Australia, primarily driven by improved financial health in New South Wales, Queensland, Victoria and Tasmania.
The bad news is that personal insolvency does still happen with regularity, and decreasing cases of insolvency doesn't necessarily mean people are richer. The AFSA study noted that in many cases, bankruptcies and insolvencies are decreasing because people are circumventing the process, finding alternate debt management strategies that can keep them above water.
Honesty is the best policy
If it looks like you might be at risk of becoming insolvent, the first thing to bear in mind is that honesty is crucial. You shouldn't lie to anyone – not to creditors, to debt management consultants you're working with or to yourself.
Go through your assets and detail every single thing of value that you own. Don't forget your home, your car or any sources of income in your life. If you're going to overcome your money troubles, you first need to detail what they are with pinpoint accuracy.
Getting out of an insolvency situation is dependent upon your ability to keep clear, accurate records, as well as to define your priorities. When creditors come calling about debts that you owe, you should be ready with a well-planned schedule for what assets you'll need to liquidate and when you can then pay them back. None of this can happen without brutal honesty regarding your financial situation.
Seeking help can be a life-saver
It's easy to become confused or overwhelmed when it comes to money trouble. There's a lot of difficult work ahead of you, and it can be tough to sort through all the details and make intelligent decisions. Fortunately, we at Corporate Lifeline have a history of helping with this challenge. When it comes to bankruptcy in Australia, there's no situation where we can't provide assistance.
Becoming insolvent or flirting with bankruptcy doesn't have to be the end for you. Instead, it can be a chance to restructure some things, re-prioritise and get a new outlook on life. With a little help, you can learn to treat it like a new beginning.