An astounding 77 per cent of SMEs reported being happy to work as a business owner for their entire working career, but many don't realise how short-lived their working career might be, a new survey has found.
A recent survey of over 2,000 ServiceSeeking users found that a vast majority are operating at the very edge of solvency.
Of the owners surveyed, 62 per cent had no rainy-day fund and of those that had one, 59 per cent had less than $5,000 in it.
It also found that 32 per cent could only stay afloat for a month in the case of a downturn in the economy. A further 25 per cent could stay afloat for up to three months.
Registered bankruptcy trustee, Aravanis, said bankruptcy doesn’t discriminate by lifestyle but it can strike some professions more than others.
Principal, Andrew Aravanis, said that some professions have higher rates of bankruptcy than others and they ranged from machine and stationary plant operators and road and rail drivers to business, human resource and marketing professionals and health professionals.
He said it can happen to hard-working people who have fallen on bad luck — like a redundancy, bereavement or divorce.
Mr Aravanis said that an interesting bankruptcy trend is beginning to emerge.
“Although it is happening slowly, more and more Australians are realising that bankruptcy is actually a valid choice when faced with overwhelming debt,” he said.
“With more information on how to navigate bankruptcy and with the stigma fading away, thousands of Australians are choosing personal insolvency options like bankruptcy to help them to move on from an unmanageable financial situation and a highly stressful emotional position.”
He also said the myths of garnished wages, automatic sale of property and international travel bans are distorting consumers’ understanding of bankruptcy, arguing they are fueled by “backyard experts” keen to share poor advice.
“This kind of misinformation adds an extra layer of difficultly for everyday Australians who need to make financial decisions while in hardship,” said Mr Aravanis.
“Another issue we’re seeing is that people looking to file for bankruptcy are engaging online providers to help them complete their bankruptcy paperwork for a steep price.”
Mr Aravanis said consumers in financial difficulty need to remember they can access professional assistance for free.