Presented by Jones Partners
For as long as we can remember, bankruptcy has been a topic of taboo. Until the mid-19th Century, those unable to pay their debts were thrown into debtors’ prison, where they remained until the debts were discharged either by repayment from a third party or through hard physical labour.
Fast forward to the early 21st Century, a highly sophisticated Bankruptcy Act now regulates the inability for individuals to pay their debts, when they become due and payable. The greatest single contributor to the transgression from quasi-criminal treatment is the increasing importance of large debt in commercial transactions. Debt has been the vehicle for a thriving global economy, enabling investment, vision and globalisation. Debt is also crucial on a personal level, allowing individuals to make investments, launch enterprise and generate future income.
Why, then, in a capitalist society built off debt, is there still so much shame surrounding individuals who become unable to repay?
When an individual experiences financial difficulty, they are often filled with fear, shame, and sense of failure. It is these sentiments which hinder individuals from seeking help. The social stigma perpetuates the silence, which in turn prevents a potential bankrupt from seeking support and guidance early on, where the impacts can usually be mitigated.
The most significant factor in propagating stigma is the ‘public record’ aspect of a bankruptcy. The NPII (National Personal Insolvency Index) is a public register, in which a bankrupt’s name, address, alias and occupation are all recorded and accessible to the public. Whilst this can seem a frightening prospect, the reality is most people never actually find out when someone experiences a personal bankruptcy. The idea to go and search the register for the names of friends, peers or colleagues, does not occur in the minds of most individuals.
Bankruptcy is an unfortunate but necessary aspect of the capitalist cycle. We at Jones Partners understand the complexity and challenges that arise when one encounters financial difficulty. Do not let the court of public opinion prevent you from achieving your best possible financial outcome. Call our specialists on +61 2 9251 5222 for a free consultation. There is always light at the end of the tunnel.