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How bankruptcy affects me

How can bankruptcy affect my job or career?

There are lots of things to consider before going bankrupt. How bankruptcy will affect your job or career is one of the most important questions you should ask.

Some types of employment will be affected by bankruptcy more than others. If you work in the financial services industry, for example in a bank, or if you work in a position where you handle money, bankruptcy is likely to affect your job.

The rules around debt relief orders (DRO) have changed. These changes could benefit those considering an insolvency solution like bankruptcy. Please take a look at the changes, as for some people a DRO will be a cheaper alternative to full bankruptcy.

What jobs does bankruptcy affect?

Some jobs are not open to bankrupt people at all. You can’t do any of the following jobs until you’re discharged from your bankruptcy:

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

If the official receiver extends your bankruptcy restrictions, you’ll also be barred from the following jobs:

  • Local or national government, for example a councillor or MP
  • School governor
  • Magistrate

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Bankruptcy and my employment

Many jobs are not affected at all if you go bankrupt. However, with some types of employment bankruptcy can have severe consequences, so it’s always important to check first.

In some jobs, a record of bankruptcy may lead to dismissal, demotion or other issues. Some professional membership bodies don’t allow undischarged bankrupts to remain members.

If you work in the following industries, you should check whether bankruptcy will have any effect on your job:

  • Armed forces
  • Cash handling, for example in banking, payroll or security
  • Financial services, for example an accountant, mortgage broker, stock broker or financial advisor
  • Law, for example a solicitor or legal executive
  • Medicine, for example a GP or dentist
  • Property, for example an estate agent or letting agent
  • Police
  • Pub licensee
  • Security
  • Self-employment as a sole trader or partnership

Will I lose my job if I go bankrupt?

You can check your employment contract to see if it says you can’t go bankrupt. If it does say this, you won’t automatically lose your job though.

Arrange to speak confidentially to your trade union rep or your employer’s human resources department if you need more advice on how bankruptcy might affect your job.

Most importantly, don't take any steps towards going bankrupt before taking professional debt advice.