How might bankruptcy affect your job or career?

December 22, 2017

Opting to declare yourself bankrupt is a huge step to take and it is not a decision to be taken lightly. There are many things to consider before going down this route. One of the main considerations is how bankruptcy may affect your current job or future employment prospects.

In most cases being declared bankrupt will not put your job at risk, although depending on the type of work you do you may need to declare the information to your employers. An example of this would be if you working in the financial services industry. Should you be employed in this sector and are subsequently declared bankrupt you are unlikely to be able to continue working in your existing role. There are certain professions which are strictly prohibited while you are under a bankruptcy order, these are:

Company Director

  • Insolvency Practitioner
  • Charity Trustee
  • Registrar of births, marriages and deaths
  • MOT authorised examiner
  • Consumer credit licence holder
  • Justice of the Peace

You may also encounter difficulties if you are employed in the following professions, although your ability to carry on working will usually be at your employer’s discretion:

  • Armed forces
  • Banking services – such as a cashier, payroll, bank security
  • Financial services – accountant, mortgage broker, financial adviser
  • Certain legal professions such as a solicitor
  • Medical services – doctor or dentist
  • Estate agent
  • Police

Again, this is not a complete list and you should ensure you check your employment contract thoroughly before going ahead with the bankruptcy application. You should also be aware that a bankruptcy order could affect you employment opportunities in the future, so if you have any plans to start working in the above industries then bear this in mind.

Income Payments Agreement (IPA)

In the vast majority of cases you will be allowed to continue in your current role, however, depending on your salary you may face some restrictions on your income. If the Official Receiver (OR) believes you have disposable income of more than £20 a month after paying all your household bills and daily living costs, you will be asked to agree to an Income Payments Agreement (IPA). This would involve you making a monthly payment to the Official Receiver which will then be shared among your creditors.

If you do not agree to the IPA, the Official Receiver could apply to the courts to be granted an Income Payments Order (IPO). This would mean that the monthly payment you are required to make would be taken directly from your salary. In this instance your employer may be notified as to your change in circumstances although this should not have any impact on your employment situation. A typical payment order will last for three years.

If you are considering bankruptcy and are concerned as to how this may affect your employment status, call the experts at Northern Ireland Debt Solutions for a free consultation. We can explain all the options available to you and advise you whether a formal debt solution is likely to affect your ability to continue working.

Lawrence O'Hara

Insolvency Adviser

Tel: 028 2132 6269

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