Can bankruptcy affect getting a job?
As those working in insolvency know, people going through any procedure designed to ease debt have many concerns. That’s no surprise, as these are stressful situations, but the strain is often compounded by misconceptions and unclear information.
A key point of concern for people that have been declared bankrupt is whether or not this will affect their current job, or future career prospects. The answer isn’t particularly straightforward, either, which makes matters worse (or at least more confusing), however there is one simple fact that’s often overlooked. Bankruptcy is not a punishment, but an order of protection from creditors, and as such is designed to help the situation.
Needless to say, restricting an individual’s ability to work (and therefore make repayments on their outstanding debts) isn’t going to improve their predicament, so it makes sense that most people can continue in the same role they had up until filing for, or being made bankrupt.
However, there are some exceptions that are important to understand before you appeal to the court, or have any action brought against you by those you owe money.
Company directors must stand down for the duration of their bankruptcy, and whilst held in this financial status you will not be able to act on the board of governors for any educational facilities, apply for a London Black Cab Licence, take up post as an MP, or become a charity trustee.
Further to this, many jobs regulated by the Financial Services Authority, legal and property based professions (i.e. solicitors, estate agents etc.) may also be affected. Similarly, it may be difficult to find work within credit-based industries, such as telecoms or energy.
In most instances the technical law, where bankruptcy affects your job, is that you must declare this to your employer, meaning redundancy will not always be the end result. This does not take into account any specific policies that are already in place within the individual business though.
With this in mind, it’s imperative to check all company paperwork to ascertain exactly what constitutes breach of contract, as many firms- including but not exclusively banks and building societies- could have specific guidelines and courses of action in place for when a member of staff becomes bankrupt.
It’s also (unfortunately) wise to consider the realities of your situation, and the ongoing job climate. Questions regarding recent bankruptcies are not completely uncommon on application forms, and adverts for good positions are currently met with an overwhelming number of CVs.
Unsurprisingly then there have been stories published in the press of late suggesting bankrupts are experiencing more problems finding work than usual, with interviewers potentially preferring candidates with a good, if not completely clean, credit history.
However, discrimination of this kind is no more legal than any other, meaning there should be nothing to stop most people continuing to work as they did before running into any money troubles, no matter how severe their circumstances appear to be.