In the first of a two-part series, The New Daily speaks to one family devastated by a bad investment and another whose home was destroyed in a bushfire.
From having it all to losing everything, these four inspiring Australians were devastated by financial catastrophe – but ended up triumphing over adversity.
In 2012-13, more than 20,000 Australians were forced to declare bankruptcy, and nearly 10,000 people entered into debt agreements to manage their finances.
Carmel Franklin, chair of Financial Counselling Australia, says that the most common people who run into trouble are those who are unemployed or have owned a business that failed.
“It can happen to anyone,” Ms Franklin says.
“If you have a whole lot of loans then you lose your job, you may get a small redundancy that can be used to pay off the loans, but it wouldn’t take long not to have enough money to pay the rent or mortgage.
“A lot of people are over-committed or committed to the hilt. If people have a change in circumstances, it is better to see a financial counsellor or negotiate [with you lender] sooner rather than later, as a lot of people wait until their situation is dire and bankruptcy is the only option.”
Ms Franklin recommends that people build a buffer of cash for unexpected events and ensure they do their research and choose their cheapest credit option.
She also warns consumers to be wary of “pay-now, buy later” purchases.
While each experience is uniquely shattering, financial catastrophe happens to many Australians – whether through unfortunate financial decisions, natural disasters or family breakdown.
The New Daily speaks to four people who lost everything, and got it back again.
From riches to rags to riches
“Why don’t people come to the house, Mum?”
Pam Brossman’s four year-old son didn’t understand why his family never invited guests to their three-bedroom red brick apartment. Nor did he understand that his parents had lost their million dollar home in the coveted Sydney suburb of Mosman when an investment in a friend’s company went bad.
The Brossmans didn’t just lose their house: They also owed $30,000 in credit card debt and more than $80,000 to their families.
For Pam, who had enjoyed a highly successful career in the corporate world, this was rock bottom.
She spent years in a state of depression at home looking after her son.
“That [question] was the trigger that set me back out there,” she says.
“I realised I was miserable and I didn’t want my son to see me as a quitter.”
The family decided to approach their financial troubles in a targeted way. Transferring their credit card debt to a interest-free facility, the Brossmans paid down the entire $30,000 within six months.
Pam started purchasing vintage designer clothes from Mosman charity shops and selling them on eBay.
She became an early adopter of social media, then saw the potential for video marketing and most recently has been a nine times number one best-selling author on Amazon.com, now having written 10 books.
“These days I teach people how to become an Amazon number one selling author,” she says from the beach near her six-bedroom Mosman home, which has a pool and tennis court.
“It has been very successful.
“I earn in three days what I used to earn in a year in my corporate life.”
She now sees the experience of losing her family home as a blessing.
“It has brought a lot of changes to our life,” she says.
“I think it’s something that had to happen to live the life I have now.”
The family home. Gone. The car. Gone. Photos. Gone. Everything burned to the ground.
The Rooney family managed to escape from the infamous Canberra bushfires of 2003 with their lives – and very little else.
Losing everything changed the family. Emily Rooney was not living with her parents at the time, but her sense of total devastation was no less keen for that.
It took her mother and father a full year of negotiating with their insurers to get their full claim paid out.
But the money wasn’t enough to rebuild the family home.
“On top of the loss, grief and trauma, my parents’ lives were in limbo for almost 12 months until they knew what their financial position would be,” Emily says.
“They had been significantly underinsured for their contents, so [they] were financially way behind. They only saving grace was that land prices in the area had skyrocketed, so they ended up selling the block and buying in another part of Canberra nearly 18 months later.”
For the Rooneys, the turning point was getting their insurance pay-out and being able to move forward.
They sold the land their home had been on and followed their dream to travel around Australia. Sadly, however, Emily’s father was diagnosed with cancer and died three year after the bushfires.
Emily has now started an online support service Suddenly Homeless to help people who have lost their home.
Watch Pam Brossman’s video here:
Read Thursday’s edition of The New Daily for the final instalment in our two-part series.