A pioneering national study, conducted by a Monash University expert in collaboration with consumer advocates, has shed light on the hidden toll of coerced business debt, revealing how business structures are being weaponised to perpetrate financial abuse, resulting in long-term economic hardship.
The study – led by Associate Professor Vivien Chen of Monash Business School and Jasmine Opdam, Senior Policy and Advocacy Officer at Redfern Legal Centre’s Financial Abuse Service NSW, and conducted in collaboration with the Economic Abuse Reference Group – is the first national study of its kind.
It highlights how women in heterosexual relationships are disproportionately the targets of financial abuse, which can lead to lifelong consequences such as bankruptcy, poverty and homelessness.
The study finds that victim-survivors are frequently left with huge debts, sometimes amounting to millions of dollars, after being unknowingly or forcibly trapped in their ex-partner’s business affairs.
The study calls for a series of reforms to prevent and mitigate harm from coerced business debt. Key recommendations include:
- Tightening safeguards in the director and ABN registration processes
- Extending consumer-style protections to small business lending
- Reforming corporation and tax laws to recognise that directors may be prevented from managing companies due to family violence
- Family violence policies modeled on the Australian Banking Association’s guidelines to encourage business creditors to respond constructively.
Monash Business School’s Associate Professor Vivien Chen said the research exposes a significant policy blind spot.
“While Australia has made progress in addressing financial abuse through consumer credit reforms, there has been little recognition of how company and tax systems can also be exploited to cause harm,” Associate Professor Chen said.
“We need to treat coerced business debt as a serious form of economic abuse and design safeguards to reflect that reality.”
Unlike consumer credit, business lending falls outside many of the legal protections designed to protect borrowers from unfair conduct.
In many cases, victim-survivors only discovered the debts after being contacted by the Australian Tax Office or private debt collectors.
Redfern Legal Centre’s Jasmine Opdam said victim-survivors of coerced business debt don’t have access to free dispute resolution or hardship relief like they would with consumer debt.
“Business creditors are not legally required to have hardship policies,” Ms Opdam said.
“These victim-survivors often can’t afford legal representation, and the business structures they’re trapped in are costly and complex to unravel.”
The study draws on interviews with 18 frontline professionals from 10 community organisations across Australia who support victim-survivors of financial abuse.
The study was conducted in collaboration with the Economic Abuse Reference Group, a network of over 60 Australian community organisations advocating to reduce the financial impacts of family violence.
These professionals described a consistent but under-recognised pattern of coercive tactics, including forged signatures, digital impersonation, or secretly installing victim-survivors as company directors.
The consequences are often life-altering: bankruptcy, homelessness, ruined credit histories, and barriers to accessing social security. Many are left unable to work or regain financial independence due to severe mental health impacts.
“Family violence is one of the leading causes of homelessness among women,” Ms Opdam said.
“Financial abuse traps victim-survivors in a cycle of poverty, and the psychological toll can be so devastating that some are unable to recover their independence.”
This compelling research highlights the urgent need for reform to ensure that victim-survivors are not left to carry the burden of debts they never chose to take on.
