Can bankruptcy affect my job?

Will I Lose My Job If I Become Bankrupt

Will I Lose My Job If I Become Bankrupt?

For you to lose your employment as a result of becoming bankrupt, would be very unusual.

If you are self-employed, there can be issues if your work is conditional on a level of registration or certification. Reducing your certification level during your bankruptcy may allow you to stay working in your industry if bankruptcy is a limiting factor.

How to know if bankruptcy affects your employment

We recommend that you review your employment/occupation to assess whether bankruptcy will impact you. Some issues to check include:

  • Does your employment contract say that your employment will cease if you become bankrupt?
  • Do you have industry certification or registration which is a requirement of your employment? If you do, contact your licencing body. Ask if bankruptcy will affect your ability to remain registered.
  • Does legislation exist pertaining to your employment that would prevent you from continuing your employment?

What to do if bankruptcy affects your employment

If you have identified any issues, the next step is to check what impact they will have on your employment. For example, if your employment contract states that you cannot be bankrupt, we recommend you contact your HR department and discuss it with them.

We have received feedback from an employed person that the HR department advised the employment would continue without change. We have also been advised by a self-employed builder that he could continue operating but on a reduced licence. Additionally, we have been told by a Solicitor that he could continue trading but could not operate a trust account while bankrupt.

We recommend you check the effect this would have on your employment. That way you can plan your financial recovery with certainty.

If you would like to discuss this and how it would work for you, we are here to help. If you have any questions please give us a call on 1300 794 492 or email hello@understandingbankruptcy.com.au

Further Reading: We recommend our article ‘What Is Bankruptcy? How Does It Work?‘.

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