Signed, sealed, trapped: The reality of coerced business debt in Australia

A groundbreaking Monash University study has uncovered how business structures are being weaponised to trap women into massive debts they never agreed to.

When love becomes a liability

Starting a small business with a partner seems like a natural step for many Aussies, but for some, those shared dreams have turned into financial nightmares.

A national study by Monash University and Redfern Legal Centre has revealed how business structures are being weaponised in relationships to perpetrate financial abuse, leaving mostly women saddled with enormous debts they never agreed to or understood.

Associate Professor Vivien Chen from Monash Business School, who co-led the research with Jasmine Opdam from Redfern Legal Centre’s Financial Abuse Service NSW, says it’s an issue that’s been hiding in plain sight.

“While Australia has made progress in addressing financial abuse through consumer credit reforms, there’s been little recognition of how company and tax systems can also be exploited to cause harm,” Chen says. “We need to treat coerced business debt as a serious form of economic abuse and design safeguards to reflect that reality.”

‘I didn’t even know I was a director’

The study, Coerced Business Debts: Uncovering Hidden Harms from Economic Abuse, is the first of its kind in Australia. It draws on interviews with 18 frontline professionals from community legal centres and support services who help victim-survivors of financial abuse.

Their stories are harrowing: women who discover they’ve been secretly listed as company directors, signatures forged on business loans, or ABNs created in their names without their knowledge. Others are pressured to sign documents under threat or manipulation.

One caseworker described how a client’s world “changed overnight” when she discovered she was responsible for nearly $10 million in loans her ex-partner had taken out using her name. Another said victims often “can’t even get access to the company’s financials. They’re locked out until the debt collectors start calling.”

No safety net for small business victims

Unlike personal credit, which is covered by consumer protection laws and free dispute resolution through the Australian Financial Complaints Authority, business lending sits in a legal grey area.

“Business creditors aren’t legally required to have hardship policies,” says Redfern Legal Centre’s Jasmine Opdam. “Victim-survivors of coerced business debt don’t have access to the same protections as consumers, even though the harm they face can be devastating.”

The result is that many victims are left fighting banks, the ATO and commercial lenders on their own. Often, they are also dealing with the fallout of family violence, homelessness, and poor mental health.

“Business debts are bigger, more complex, and there’s far less help available,” one financial counsellor told researchers. “The lenders are far more aggressive. They’ll take you to court if you own a home, even if you were clearly coerced.”

An invisible crisis

The financial impacts are crushing. Victims often face bankruptcy, ruined credit histories, and the loss of homes or businesses. Many are also disqualified from Centrelink benefits because they’re listed as company directors, even if the business was controlled entirely by their abuser.

“Family violence is one of the leading causes of homelessness among women,” says Opdam. “Financial abuse traps victim-survivors in a cycle of poverty, and the psychological toll can be so devastating that some never recover their independence.”

The study highlights that the lack of free legal or financial advice makes matters worse. With few community services equipped to handle business debt, victims are forced to pay for commercial lawyers who can charge tens of thousands just to take on a case. Most simply give up.

Calls for urgent reforms

The report makes a series of urgent recommendations to close the legal and policy gaps that currently allow abusers to weaponise business systems against their partners. It calls for tougher checks on director and ABN registrations to stop fraudulent or coerced appointments, and for small business borrowers to be given the same consumer-style protections and access to dispute resolution as individuals.

The study’s authors also want corporate and tax laws amended to recognise that family violence can prevent directors from carrying out their duties, and for all business creditors to adopt family violence policies similar to those used by the Australian Banking Association.

“These reforms would help ensure that victim-survivors aren’t left paying for debts they never chose to take on,” Associate Professor Vivien Chen says.

Time for change

Financial abuse might not leave visible scars, but its impact is life-altering. For the women caught in the web of coerced business debt, escaping violence often means facing a second battle against creditors, the courts, and the system itself.

“This isn’t about dodging responsibility,” Opdam says. “It’s about recognising that our laws weren’t built with these experiences in mind. We need to update them so survivors can rebuild their lives — not spend years paying for someone else’s control.”