Financial hardship is a reality

Monday, July 8, 2019

For many Australians, financial hardship is a reality. Statistics from the National Financial Capability Strategy show that one in five Australians is not able to access $2000 in an emergency, and two in three Australians do not know the  current value of their superannuation. For many, the management of day-to-day finances feels like an impossible goal.

Our own statistics show that excessive use of credit, followed by unemployment or loss of income are the main causes of non-business related personal insolvencies and economic conditions are the main cause for a business-related  personal insolvency.

Deciding to go bankrupt or being made bankrupt is a serious matter. Those facing bankruptcy can feel overwhelmed by the volume of information available and may not be aware of—or clearly understand—the options available to them.  We understand from our own research that people in this position may feel vulnerable, anxious or even embarrassed.

In any system there are those who seek to prey on the vulnerable for commercial gain. Our research shows that people experiencing financial stress often go with the first piece of information or advice they come across and may be lured  into paying thousands of dollars in fees to companies offering financial relief.

Bankruptcy comes with consequences, but it also offers relief and a chance for a fresh start—and you can go bankrupt for free.

Our focus is on ensuring people have easy access to information that will help them make an informed decision about their financial circumstances. This includes not only our own information but also supporting other services that have a  role in assisting people in financial hardship

We are proud to be a partner of the National Financial Capability Strategy and we work closely with ASIC’s MoneySmart and others to develop and promote information products and resources to support financial well-being.

We are also committed to doing everything in our power to disrupt untrustworthy advisors who seek to exploit others for their own advantage, but we can’t do it alone. Everyone has a role to play in a balanced system. If you have concerns about advice you’ve received, or advice provided to someone you know in relation to personal insolvency, please notify us by making a tip off. You can elect to do this anonymously if you prefer.

Joanna Stone

Acting Deputy Chief Executive & Chief Operating Officer