Bankruptcy’s Effect on Employment
By Administrator 11 December, 2014
One of the major concerns when considering declaring bankruptcy is whether or not it will affect your employment. For the majority of people, bankruptcy should have no adverse effects on their job. It can present as a concern for some, though, particularly if they work in certain fields or require certain licences to carry out their job.
Declaring bankruptcy can affect the holding of certain licences, so if you need a particular licence to carry out your job, you need to take this into consideration before applying for bankruptcy. The responsibility for the decision lies with the organisation that provides the licence, so you will need to speak to them directly for advice. Some people may be subject to very strict employment conditions, especially if they work in industries where bankruptcy could create a conflict, such as the gaming and finance industries. If there is a clause in your contract stating that your employment will be terminated if you declare bankruptcy, you need to be prepared for that eventuality.
In regards to whether your employer will be notified of your bankruptcy, the answer is generally no. However, bankruptcy is recorded on the National Personal Insolvency Index (NPII), which an employer can search at any time to obtain information about any current or past insolvency arrangements that you may have been a party to. If you owe your employer money and they are listed as a creditor in your bankruptcy, they will obviously be notified of your bankruptcy and will receive all of the necessary reports from your Trustee. A garnishee notice could also be issued to your employer that requires them to pay part of your wages directly to the Trustee if you fail to make your compulsory income contributions during your bankruptcy.
If you have concerns or doubts about bankruptcy and how it may affect your employment, feel free to speak to one of our expert consultants on 1800 676 598. Our telephone hotline operates 24 hour, 7 days a week so that you can reach us anytime that is convenient for you.