People are losing their homes over a $10,000 debt: this must stop |
Imagine losing your home or business because of a debt that could have been negotiated, or because the rules meant to protect you are stuck in another era. This is the stark reality today as many Australians are being forced into bankruptcy over debts as small as $10,000.
Sometimes people need practical hardship arrangements such as affordable longer-term payment plans.Credit: Getty Images
Financial Counselling Australia’s report, Who’s making Australians Bankrupt?, found that forced bankruptcy is climbing. It was up 26 per cent in FY2023/24 and a further 16 per cent in FY2024/25. More than 6700 creditor petitions have been filed in the past four financial years alone.
Behind every statistic is a real person, a family, a community.
I am one of the very few fully funded financial counsellors who attends the Federal Court each week to assist people forced into bankruptcy by a creditor.
These people can rarely afford legal representation, so they will often arrive in court on their own and with very little understanding of the process and the potential consequences. This is especially traumatic for those who own an asset such as their home.
We see many people in court with unaffordable strata........