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My Job and Bankruptcy

My Job and BankruptcyThere is generally no need to be worried about your job and Bankruptcy. The vast majority of jobs are not affected. You continue going to work as normal.

  • Is your employer told that you are Bankrupt?
  • Which jobs are affected if you go Bankrupt?
  • What if you think your job will be affected?
  • Can you get a new job?

Do you want help to go bankrupt? Give us a call (0800 044 3194) or complete the form below to speak to one of our experts

Is your Employer told you are Bankrupt?

One of the main concerns about bankruptcy is whether your employer will be told about it. In the vast majority of cases they will not. This is because the Official Receiver has no obligation to inform them.

As such unless you tell them yourself they are unlikely to find out. The only way they might do so is if they do a credit check against you or search the Insolvency Register. However most employers have no reason to do this.

Your employer will continue to pay your wages into your bank account as normal. HMRC may inform them that your tax code should be changed to Zero. However no reason will be given for this. Most employers will simply carry out the instruction without questioning it.

There are rare occasions where your employment contract may require you to tell your employer if you go bankrupt. If this is the case you should not apply without first discussing the implications with your Manager or HR department.

Which Jobs are affected if you go Bankrupt?

If you are working for a Financial Services company, the Civil Service the Armed Forces or Police you may have heard that you cannot go bankrupt. In reality this is not the case for most people.

Most civil service jobs are certainly not affected by bankruptcy. In addition you will be able to continue your role in the vast majority of financial services positions.

If you work for the armed forced and police bankruptcy is not prohibited. However it is recommended that to speak to your manager or superior about the implications before you apply.

There are a small number of jobs that cannot be performed if you are bankrupt. These include being a Company Director, Chartered Accountant, Solicitor or Member of Parliament. In addition you are not allowed to act as a Trustee of a Charity.

What should you do if you think Bankruptcy will affect your Job?

You may be unsure whether bankruptcy will affect your job or not. If this is the case you must first check your employment contract.

Your contract may not have a specific reference to Bankruptcy. However there might be a clause which says that your employer may terminate your contract if you become insolvent.

The important word here is “may”. This gives your employer the option to terminate. However it does not mean they will do. Nine times out of ten they will not take any action if you go bankrupt. You will simply continue with your job as normal. However you should check with them first.

If you are concerned about the implications of any clause in your contract you should speak to your Manager or HR department. Ask a hypothetical question: “If someone in my position were to go bankrupt how would the company / organisation react?”.

Can you get a new Job if you are Bankrupt?

There is no legal reason that stops you applying for a new job while you are bankrupt. However if you do it is important to check the application forms for questions about insolvency.

If you are asked whether you are currently Bankrupt or Insolvent it is best to be honest. A potential employer can check your name against the insolvency register very easily if this is important to them.

You may not be asked anything about your bankruptcy during the interview process. However if you are subsequently offered the job you need to check your employment contract.

If there is any requirement in the contract to tell your employer if you go bankrupt it might be wise to be honest with them. Tell them about your bankruptcy before accepting the job unless you are very close to being discharged.

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