The weight of financial stress is heavy and the emotions involved can be overwhelming. In Australia, insolvency has an unfair stigma attached to it, for reasons that really are unknown, but it possibly stems from a lack of understanding amongst the general public about what insolvency is and what it means. Aiko Wang of Rogers Reidy points out the following observation:

“One of the biggest misconceptions about insolvency in the general public is that it is a failure or something to be ashamed of. In reality, insolvency is a legitimate process prescribed under the law, and it is a necessary process that can help individuals and businesses recover from financial difficulties.”

Insolvency is when a company or person can’t pay debts when they are due. Corporate insolvency is also known as liquidation, receivership, and voluntary administration. Personal insolvency is commonly known as bankruptcy. 

The mental and emotional stress of insolvency

The reality of facing insolvency goes beyond business and the dollars and cents of it all and into the personal lives of those involved. The worry and anxiety about all of the unknowns can lead to stress and feeling overwhelmed.

The longer the stress continues the more exhausting it becomes. Financial anxiety, the fear of failure and being seen as a failure, as well as identity issues and the strain of personal relationships all combine to make life feel difficult. 

Financial anxiety: Business owners invest their time, energy, and personal finances into their ventures, and the thought of financial ruin can take its toll.  The constant worry about debt, impending legal actions, and the potential loss of personal assets can trigger anxiety and other mental health problems. 

Fear of business failure: As the above quote from Aiko Wang highlighted, the fear of being seen as a failure is one of the biggest reasons people don’t seek help before problems escalate. The emotional attachment to the business, coupled with the sense of responsibility towards employees and stakeholders, can be emotionally draining. The fear of letting down those who depend on the business is a very real reason business owners struggle to ask for help. 

Loss of identity: Many entrepreneurs identify closely with their businesses, and when insolvency looms, it can rattle the emotional cage. 

Relationship strain: Insolvency can also strain personal relationships. The stress of financial troubles can lead to increased tension at home, impacting family dynamics and interpersonal relationships. 

There is some good news though. Insolvency is nothing more than a business process and it is far from the crisis that it is commonly believed to be. 

Insolvency is not the end of the world; it might even be the beginning of a new one

Insolvency is not the end of the world, and if anything, it is a chance to learn valuable lessons and get a fresh start. Many successful people have had financial difficulties and still gone on to have very successful lives and careers. Many of them are household names.

From financial woes to innovation and success: Walt Disney

Early success didn’t make Walt Disney immune to a financial stumble. The early days in Kansas were strong but eventually, they led to bankruptcy. Instead of this being the end of Walt Disney,  it was the beginning. He left Kansas and moved to Hollywood where The Walt Disney Company was formed.  This led to DisneyLand and Walt Disney’s world and innovation that altered film for generations. 

Walt Disney is in good company with Henry Ford. Ford too went bankrupt after producing only 20 cars. These so-called financial failures were the precursor to extraordinary success. They weren’t stopped because of the opinions of others and they weren’t stopped by their own minds telling them they had permanently failed. 

How corporate insolvency services can help you move forward

Rodgers Reidy provides expert corporate insolvency services and corporate advisory services to struggling businesses and our approach is people-first. We understand the stress and anxiety involved with insolvency issues and we will work with you to get the best outcome possible for your situation. 

It is our primary goal, whenever feasible, to save a company or person facing financial challenges. To do this we look for every possible solution to restore financial viability and we aim to build arrangements that benefit all stakeholders. 

There are benefits to a legitimate insolvency process, not the least of which is the chance to move forward with a fresh perspective and a new start. You can move forward having resolved debts fairly and with integrity.