Bankruptcy is a debt solution that’s often only considered as a last resort. Once you’ve declared bankruptcy, a trustee will sell your assets in order to repay as much of your debt as possible. After this is over the remainder of the debts included in your bankruptcy will be written off.
In addition to having the potential to impact your home, property and assets, bankruptcy can also have an effect on your working life, which is why we’ll outline exactly how bankruptcy can affect your employment.
Will I lose my job if I go bankrupt?
Someone who’s filed bankruptcy won’t automatically lose their job in the majority of cases. However, there are certain employment sectors, such as financial services (where the ability to handle money responsibly is paramount) that may view bankruptcy negatively.
Insolvency Practitioners, for example, are banned from their roles if they become bankrupt. Similarly, if you work as a mortgage broker or accountant, you probably have a clause relating to bankruptcy in your contract. You might not be dismissed from your role, but there may be repercussions for you becoming bankrupt, so it’s worth checking your contract if you’re concerned.
People who’re licensed to work in the gambling industry may also face consequences if they become bankrupt. Again, this is due to the nature of the role in question; a croupier is trusted to handle money and look after the bets and payouts of a casino’s customers, and as such will have their license revoked by the gambling commission if they’ve declared bankruptcy.
Do I have to tell my employer about it?
Unless it’s explicitly stated in your employment contract, you won’t have to tell your employer if you’ve declared bankruptcy. Your bankruptcy will become public knowledge due to details of it being placed on the Insolvency Register, but employers are unlikely to check this so the chances of them finding out about it (unless you tell them) are slim. Again, it’s important to consider how bankruptcy can affect your employment before you decide to file for it.
What if I’ve been bankrupt in the past?
In some instances, being declared bankrupt in the past may affect an employment opportunity if you’re applying for a new role. This is because some employers may perform a credit check on potential new employees to ensure they’re financially responsible (, for example in roles that involve financial services ). For most jobs, however, being bankrupt in the past shouldn’t affect your employment prospects.
What if I’m a sole trader?
Bankruptcy will also have an effect on your business if you’re a sole trader. The poor credit rating you’ll have as a result of your bankruptcy might make it difficult for you to obtain credit and trade as you were doing prior to your bankruptcy.
If you’re a sole trader struggling to obtain credit after bankruptcy, there are a number of loan providers in the UK who specialise in lending to people with poor credit. What’s more, there are a variety of things you can do to rebuild your credit after bankruptcy.
If you’re worried about bankruptcy, then feel free to give us a call on 0800 316 1833 . Our phone lines are open between the hours of 8am to 8pm Monday to Friday, and 9am to 3pm on Saturday.