Can I get a new job while I am bankrupt
- 17 Feb 2022
You may decide to get a new job while you are bankrupt. Perhaps you are made redundant or simply find something better. Generally speaking there is nothing to stop you. However, there are some implications to be aware of.
Included in this article:
- Does being bankrupt stop you from getting a new job?
- What happens if your wages go up?
- What if your income goes down?
Rather speak to a person? Call us (0800 044 3194) or click here to complete the form below and we’ll call you back
Does being bankrupt stop you from getting a new job?
You are allowed to apply for and start a new job when you are bankrupt. Most job application forms will not even ask you about your situation – although there are some exceptions (see below).
Once you start, your new employer will not be told about your bankruptcy, so it is extremely unlikely that they will find out unless you chose to tell them.
Your wages will be paid into your bank account (or any other account you choose) as normal. The Official Receiver (OR) will be interested in any extra money you might earn. However it is your responsibility to tell them about this. They will not write to your new employer themselves for any reason.
There are a few jobs where your financial circumstances are of interest to a potential employer. If you are asked on an application whether you are currently bankrupt, you should be honest and say yes. An employer who is really interested, can check the insolvency register and find out if they wish.
If you get a new job, generally speaking your new employer will never find out that you are bankrupt unless you tell them.
What happens if your wages go up?
If your wages go up as a result of your new job, you may have to start making monthly payments towards your debt. This would be in the form of an IPA (Income Payment Agreement). If you already have an IPA, the payments you are currently making could go up.
However, this is not guaranteed. It ultimately depends on whether your surplus income changes.
Where you are in receipt of benefits such as tax credits or universal credit, these will reduce if your wages increase. As a result, your total income may actually stay the same. If so, there will be no change to your surplus income and no change to the amount you are paying towards your debts.
You also have to take into account increases in your living expenses associated with your new job. Perhaps your travel expenses will go up. This will off-set some of your additional income and reduce any potential increase to your payments.
If your wages go up as a result of your new job, you must tell the Official Receiver straight away. They will need to do a review of your new income and expenditure to see if you can now afford to start making payments towards your debts.
What if your income goes down?
It is possible that you might get a new job while you are bankrupt which pays less money. You are not obliged to tell the OR about this. If you are not currently making payments towards your debts there is nothing for you to do.
However, where you currently have an IPA in place, it is in your interest to inform the OR about the change. They can then arrange for a review your income and expenditure budget.
If your surplus income has fallen or disappeared altogether, your payments will be reduced or cancelled.
The fact that debt payments can be reduced or stopped if your income falls, is a significant advantage of going bankrupt. Unlike other debt solutions, bankruptcy is not reliant on you being able to repay anything back. If you can’t afford to make payments towards your debts you do not have to.
Where your income is uncertain or likely to reduce in the short or medium term, bankruptcy can be an extremely useful debt solution.
My friend works in DWP pension service dealing reported death. If he has to go bankrupt will he lose his job?
Hi Shelly
I am quite sure your friend’s job would be affected in any way if he goes bankrupt. The bottom line is his employer will not be told and they will never find out unless he tells them. You can read more about who would be told if he goes here: Who will find out I am bankrupt
Hi I have been offered a job with the council that looks in to security work I am bankrupt would I still be able to do this type of work
Hi Donnad
I am not aware of any reason why you should be prevented from taking a job in security with your local council if you are bankrupt.
If you have been through the application process and you have not been asked if you are currently bankrupt, then I do not believe it is an issue for the potential employer. If it was, they could check very easy by simply looking at the insolvency register.
Remember, if you do take the job and your income increases as a result, you must let the official receiver know so they can re-assess your income and living expenses budget. If your surplus income goes up, you may then be asked to start paying an IPA.