Your business recovered but your personal debt remains.
Business recovery and household recovery may follow different paths. Identify the debts you personally owe and the income realistically available to address them.
Corporate Recovery Partners
01 / 06
The workshop is stable but the home budget is not
A mechanic’s company begins paying its bills on time again. During the crisis, the owner used personal credit cards and borrowed against household savings to support it. The business now looks healthier, but the owner’s repayments remain unaffordable. Increasing drawings without checking the company’s position could restart the problem at work.
List company debts and personal debts separately, identifying any guarantees or shared liabilities that connect them. Record the borrower, balance, security and payment requirement from the actual documents. A transfer made for business purposes does not by itself tell you who owes the lender.
Ask the accountant to reconcile any money advanced to the company. Do not assume every personal expense becomes a recoverable company loan.
Estimate what the business can properly pay the owner after its own commitments, with advice on wages, drawings or distributions as appropriate. Then build a household budget using that amount rather than the income earned before the crisis.
Include irregular essential costs. A personal repayment offer that ignores them may fail even while the company continues to trade successfully.
ASIC’s Moneysmart recommends contacting a lender’s hardship team when personal loan or credit repayments become unaffordable. Explain the income available and ask what assistance can be assessed. These consumer resources should not be assumed to apply identically to every business facility.
Keep records of the application and any agreed arrangement. Read its terms before relying on a change to the original payment schedule.
Get advice before using company funds or assets to deal with personal claims. Directors’ duties, other creditors and the actual company position remain relevant even after trading improves.
Consider independent financial counselling or legal advice where guarantees, secured debts or conflicting interests are involved. The aim is a household plan that can last alongside the business recovery, not another short-term transfer between two shortages.
