Simpsons & Associates has recently taken on a new client, Manu Tevita, a self-employed mortgage broker who is facing the prospect of bankruptcy. His personal insolvency arose from his ongoing mental health challenges and online gambling of his personal assets. This led to a loss of focus on his brokerage business and subsequently providing some poor advice, and consequently a loss of a sizeable number of clients. He has also applied some of his personal assets to support his business.

Prior to the onset of his mental health issue, the business had been performing well, employing several other more junior mortgage brokers, a recent graduate, and administrative staff. Manu owns his home jointly with his wife, and they live there with their three children. There is, however, a mortgage over the property with a bank and a second mortgage from Manu’s wife’s parents. Manu’s wife Kalina has previously worked part-time as a teacher at an early childhood learning center but is currently full-time looking after the children.

Manu has sought treatment, and with medication is managing his anxiety most of the time, and is seeing a counselor concerning his gambling, which is enabling him to refocus on his business. It is Manu’s intention to continue to work as a mortgage broker, as he is very keen to support those in his local community. He expects that he will be able to earn a good income and pay his creditors a reasonable contribution towards his outstanding debts (both business and personal). However, there is no form of repayment plan in place, which increases the risk of one of his creditors petitioning for his bankruptcy and undoing the management of his anxiety disorder.

Furthermore, Manu will need to relinquish his mortgage broker’s license, if he becomes bankrupt, for the period of the bankruptcy. He may also find it difficult to secure a new license in the future. Prior to being a mortgage broker, Manu had worked as an assistant manager in a large bank. Manu’s expectation is that members of his wider family are willing to provide limited financial support towards repaying his debts. Manu is unsure of what his options are. From the limited information held on the client file, you have ascertained that his business debts are approximately $150,000 (related to the mortgage brokerage business), and his available personal financial assets are less than $50,000.