Gippsland mental health not-for-profit Barrier Breakers went into liquidation recently, after the organisation could not pay back more than $100,000 in debt.

Barrier Breakers board members considered the Traralgon and Sale based agency was insolvent and could not meet its creditor’s demands.

Barrier Breakers has provided free mental health advocacy services in Gippsland since 2006.

In 2020, former Gippsland Farmer Relief chief executive and Latrobe City Councillor Melissa Ferguson was appointed as its chief executive.

Founder and long-serving director Derek Amos said he was “deeply saddened by the decision”, but accepted it had no choice but to close its doors.

After news that the not-for-profit had gone into liquidation, Mr Amos said the board was negotiating to transfer its clients to other agencies.

Barrier Breakers is the second Gippsland mental health provider to shut shop recently, after Within Australia went into voluntary liquidation.

Mr Amos said it became clear that Barrier Breakers could not pay its debts after the board was led to believe its financial status was “not as serious as it turned out to be”.

He said most of the debt was related to administration, tax and unpaid entitlements for seven staff.

“It was obvious that there was no way we could trade our way out of the situation, so we had to call the liquidators,” Mr Amos said.

“When we found out we owed that amount of money, we took steps to enter into a scheme of repayments prior to going into liquidation, but this didn’t occur.”

Mr Amos said the organisation mostly relied on about a dozen-or-so volunteers, with more than half of its financial support coming from the community.

“Our association had pleaded with governments for funding over the years, but little support had been provided,” Mr Amos said.

“You can live on a shoestring and do some marvellous things, but we needed a major injection of funds to keep going, and we received no such injection.”

A Victorian government spokesperson said this year’s state budget included $1.3 billion for new mental health and wellbeing initiatives, up from last year’s investment of $3.8 billion.

“We want all Victorians to know when they’re in crisis, there are services that will give them the tailored mental healthcare they need, close to home, no matter where they live in Victoria,” the spokesperson said.

“We are delivering a range of mental health initiatives for the Gippsland region, including tailored support for young people and our Hospital Outreach Post-suicidal Engagement program.”