Debt Stress? Practical Steps to Protect Your Farm or Family Business

Running a farm or business in this current economy is especially tough. Across Queensland, more farmers and regional businesses are having hard times staying afloat. If we look at the recent statistics, insolvencies are now on the rise. Company insolvencies are at their highest levels since the 1990s recession, with an estimated 14,100 insolvencies expected between 2024 and 2025. In the agriculture, forestry and fishing industries, insolvency rates have nearly doubled up by 89% in mid-2024.

For some business owners, this is a worrisome picture. However, if you find yourself in this situation, acting early is important. Here are some practical steps you can take to help you back on track:

What you need to consider:

1. Simplified Debt Restructuring for Small Businesses

Since January 2021, the Australian Government has introduced a new, simplified debt restructuring process for eligible small businesses. This process provides struggling small businesses with a straightforward way to reorganise their debts, while allowing owners to remain in control. It helps more businesses keep operating, which is better for owners, employees, creditors and the wider economy.

2. Make use of Farm Debt Mediation

In Queensland, farmers may be required to mediate with their lenders under the Farm Business Debt Mediation Act 2017 (Qld). This is a great opportunity to negotiate realistic and sustainable repayment options. (We’ve written more about this: Farm Debt Mediation).

3. Proactively Manage ATO Liabilities

Recently, the Australian Taxation Office (ATO) has been ramping up enforcement on PAYG, GST and superannuation debts. Repayment terms are now stricter and arrangements harder to secure. If you’re behind, don’t ignore it. Speak to an accountant, tax professional or lawyer, to understand what options you have before things escalate to penalties, garnishees or even liquidation.

4. Identify the Red Flags Early

Warning signs include invoice defaults, notices from ATO, and consistent gaps in cash flows. In Queensland, industries such as hospitality and construction are currently at particularly high risk. Hence, if you are in a similar position, it’s best to act now.

5. Access Financial Counselling

Free support is available, including the National Debt Helpline (1800 007 007), or through Australian Financial Security Authority (AFSA) and registered insolvency professionals. Remember that professional is available to help you, not judge you.

6. Seek Legal Advice Early

The earlier you address the issue, the more options will be available to you. A lawyer can help negotiate with creditors or the ATO and can also help you through mediation or restructuring.

The Bottom Line

The financial outlook in 2025 for farmers, family businesses and agribusinesses in Queensland is undeniably challenging. However, with early intervention and the right legal guidance, there may be path to recovery.

Debt pressures can feel overwhelming, but you don’t have to face them alone. At Creevey Horrell Lawyers, we specialise in supporting Queensland farmers and family businesses through tough times. Contact us today for confidential legal advice.