Perspectives of Financial Counsellors and Consumer Solicitors on Personal Insolvency
17 Pages Posted: 15 Sep 2015
Date Written: September 15, 2015
In 2014, a group of researchers at Melbourne Law School commenced a major empirical research project, focussing on Australia’s personal insolvency laws and their practical impact on people in financial distress. As part of the project, in early 2015, the research team conducted a national online survey of financial counsellors, consumer solicitors and other advocates who specialise in helping financially distressed individuals. The survey found that many of these advocates were highly sceptical about the value of debt agreements, or ‘Part IX’ agreements. By contrast, they generally saw bankruptcy as a useful and effective ‘last resort’ for people in financial crisis. At the same time, several advocates expressed concern regarding the long term impact of bankruptcy upon severely disadvantaged debtors. Several expressed the view that bankruptcy does not offer a genuine ‘fresh start’ for those who rely on inadequate social security income, or suffer from other disadvantages, such as mental illness. Instead, for people in this situation, bankruptcy offers little more than a temporary reprieve from ongoing, acute financial hardship.
Keywords: personal insolvency, bankruptcy, debt agreements, financial counsellors
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