We explain what affect declaring yourself Bankrupt will have on your employment and whether your employer will be told.

Your employer will not automatically be told by the court or official receiver if you are declared Bankrupt. In addition, there is also no legal obligation on you to let your employer know about your situation unless you have a specific clause in your employment contract stating that you must do so.

Your name is no longer advertised in the local newspaper (unless you live in Northern Ireland). However your name and address is entered in the Insolvency Register and a publication called the Stubbs Gazette. Both of these are publicly accessible via the internet.

Given this it is possible that your employer could search the Insolvency Register for your name and discover that you are bankrupt. However in the case of most employers the possibility that they will search the Insolvency Register is extremely unlikely. The fact is that most people do not even know that it exists.

Will Bankruptcy affect my ability to do my job?

For most jobs the fact that you are Bankrupt will have no affect on your employment status or ability to continue to work for your employer.

This procedure is not a criminal offence. As such it will not be recorded or show on any CRB (criminal records) checks that your employer may take out on you. Of course there are some jobs which could be affected. These include a member of the police or armed forces and also certain legal and financial positions.

BMD Tip: If you are concerned that your job might be affected you should speak to your manager or a member of your personnel department before starting the application process.

Do you want help to go bankrupt? Give us a call on 0800 077 6180 or complete the form below to speak to one of our experts

Why do you give your employer’s details on bankruptcy application form?

If your employer is not told about your circumstances a valid question to ask is why do you have to record your employer’s details on your bankruptcy application form? The reason for this so that your employer can be told of any change to your tax code required by the official receiver.

If you are currently paying income tax via the PAYE system, it is likely that the official receiver will require that your tax code is changed to a zero tax band.

For the period you are bankrupt tax is then not deducted from your wages. The official receiver may ask you to pay the extra money you receive in your wages to them each month from your bank account as a payment towards your creditors.

How will my bankruptcy affect my employer?

For the vast majority of people, the fact that they have gone Bankrupt will not affect their employer in any way. Your employer will not need to make any special provisions and their business and tax affairs will be totally unchanged.

Of course there may be a few rare situations where your employer could be affected. For example your employer might have a specific financial licence which would be affected if you were declared bankrupt. However this is unusual.

Generally if this is the case you will be aware of the potential problem before you start the process and can discuss it in advance with your employer.