.png)
When a business starts to struggle, the numbers tell one story, but the people tell another.
Behind every overdue tax bill, creditor call, or unpaid wage is a director losing sleep, a partner questioning their next move, and a trusted advisor trying to balance empathy with honesty. Financial distress isn’t just a balance sheet issue; it’s an emotional one.And when fear takes hold, even experienced business owners can delay decisions that would protect them in the long run.
1. Fear, shame and avoidance, the emotional loop that stalls action
Many directors know, deep down, when their business is in trouble. However admitting it, to themselves, their staff, or their accountant, often feels like failure.
This emotional barrier creates a dangerous delay. The longer they avoid confronting reality, the fewer options remain.
Common signs include:
- Missing meetings or withholding financial information
- Deflecting hard questions about debt or tax
- Hoping for a “big job” or “next month’s cash flow” to turn things around
For accountants and lawyers, recognising these signs early is key to breaking the cycle before it becomes irreversible.
2. Why logic isn’t enough
Advisors often lead with facts: cash flow statements, compliance deadlines, ATO obligations.
But when clients are in survival mode, logic can bounce off emotion.
They’re not hearing “You need to act now”; they’re hearing “You’ve failed.” That’s why tone matters as much as timing.
Approaching the conversation with empathy, not alarm, helps clients stay open to practical next steps rather than shutting down.
3. The advisor’s role: guide, not judge
Insolvency is full of misconceptions. Many clients assume that seeking help means losing everything or being branded a failure.
In reality, early engagement with a specialist often leads to better outcomes: restructuring options, debt agreements, or orderly wind-downs that protect personal and professional reputation.
The role of the advisor is to:
- Listen first, without rushing to a solution
- Frame insolvency advice as a path to clarity, not collapse
- Bring in specialists early, so the client feels supported by a team, not abandoned
When handled this way, the advisor strengthens trust, even in crisis.
4. How empathy drives better commercial outcomes
Empathy doesn’t mean sugar-coating the truth. It means understanding that emotion drives decision-making.
When a client feels heard and supported, they’re far more likely to act, to file that BAS, to review cash flow, to make the call that starts the restructuring process.
Insolvency handled with humanity leads to better outcomes: for the business, for the client, and for the advisor who helped them take that first step.
Advisors are often the first to notice distress but the last people a client wants to admit it to. The best thing you can do is combine commercial insight with compassion and connect them early with experts who can guide them through the process.
At Insolvency Options, we see this every day.
When empathy meets expertise, clients move from fear to informed action and that’s where real recovery begins.
Need to discuss a client scenario confidentially?
Contact Insolvency Options for a no-obligation consultation, we work alongside you to protect your client relationships and find the best path forward.
Book a confidential consultation with Darren
Want to go deeper?
For more insights into business recovery and debt solutions, listen to the i.O. — Insolvency Options podcast wherever you get your favourite podcasts. Each episode breaks down complex insolvency processes in plain English, with real world examples to help accountants, lawyers, and business advisors guide their clients with confidence.