Faith in the insolvency process can alleviate stress

In Jirsch Sutherland Partner Stewart Free’s 25-plus years as an insolvency practitioner, he’s worked with many business owners who have suffered from mental ill-health problems as a result of financial issues. “A few times each month I meet clients who are finding it hard to cope with the associated stress and pressures, and this can affect their physical and mental health,” he says.

Stewart Free, Jirsch Sutherland Partner
Stewart Free, Jirsch Sutherland Partner

For Free, a common sign an owner isn’t coping is when they ignore their situation, hoping it will simply go away. “They adopt a ‘head in the sand’ mentality,” he says. “As a result, they often leave getting help too late.”

Explaining that insolvency is a process designed to get business owners through their troubles can help alleviate this type of stress, Free says. “I explain it’s a legal process and to put their faith in it,” he says. “I tell them there’s a plan with a start, a middle and an end that will get them out the other side. I reassure them they will get through it and life will go on. They can choose to have it as a burden or believe in the process.

“Fortunately, in Australia, the financial laws promote entrepreneurial activity. If a business owner experiences problems, there’s a mechanism that alleviates their debt. Once business owners and private clients facing bankruptcy view it that way, it becomes more acceptable and destresses the situation.

But many owners also feel ashamed and that they have failed when they enter into insolvency. “I explain that insolvency isn’t a personal failure, so there should be no shame associated with it,” Free says. “They are not the only person who has gone through this process. If they have children, I explain that, more often than not, there are other parents who have gone through bankruptcy and continue on with their lives.”

Free also tries to get business owners to look at insolvency or bankruptcy in a different light by asking them, ‘what’s the worst thing that can happen in life?’. “Compared to the loss of a loved one or serious illness, it’s not insolvency or bankruptcy. You can see the weight come off their shoulders when they look at their situation differently.”

But Free says it’s understandable that emotions run high. “I’m a huge believer in having a good cry. Then we can get on with the process. I tell owners ‘the sun rose today and set on the other side and it will do it again tomorrow and the next day’. Life goes on and there’s an end to their situation. I’d like to scream from the rooftops, it’s not that bad as there’s a process!”

Nine factors that contribute to a mentally health workplace

1. Prioritising mental health: Provide mental health education for all staff to raise awareness, increase understanding and encourage open discussion.

2. Trusting, fair and respectful culture: Provide employees with skills to interact with honesty and respect with colleagues and clients.

3. Open and honest leadership: Employ effective leadership to give employees a sense of shared purpose in the goals of the organisation.

4. Good job design: match job roles to people’s skills and abilities, ensure they are physically safe and offer working arrangements that suit them.

5. Workload management: set tasks that can be accomplished successfully in a reasonable time, using readily available resources.

6. Employee development: offer an environment where employees have regular two-way feedback and are encouraged, acknowledged and rewarded.

7. Inclusion and influence: arrange for employees to have control of the way they work and input into the important decisions of the organisation.

8. Work/life balance: recognise the importance of work/life balance and provide employees with the opportunity to balance the demands of work, family and personal life.

9. Mental health support: ensure that managers and staff are responsive to an employee’s mental health conditions regardless of cause and that adjustments to work and counselling support are available.

Source: Heads Up

WA Insolvency Solutions