Bankruptcy and Employment
Some people don’t think about what impact bankruptcy can have on their job. Bankruptcy can impact severely on which jobs or professions you can be employed in. What you do now, or may do in the future,for a living should be considered before filing for bankruptcy.
The Bankruptcy Act itself doesn’t restrict what types of work a bankrupt can engage in. The restrictions generally relate to professional or governing bodies (eg Master Builders Association) by-laws. These professional bodies have by-laws stating that bankrupts can’t be members of the association, and since you need to be a member to engage in that employment it effectively stops you from working in that profession. The Bankruptcy Act does not prevent you from being an accountant. However, the CPA (certified practicing accountants) association will not let you be a member if you are bankrupt, and since you need to be a member of the CPA to practice, bankrupcy effectively prevents people from being accountants. The other way bankruptcy can affect your job is by another legal act which stipulates that bankrupts cannot engage in that employment. The ASIC Act prevents bankrupts from being company directors, and the Queensland Gaming Act prevents bankrupts from holding gaming licence or working in casinos.
While you may need the protection of bankrupcy to help you get past insurmountable debt, you should take into account the impact that bankruptcy will have on your future earnings which may extend beyond the bankruptcy period if your profession is taken into account. It may be that you have no other option but to file for Bankruptcy.
The following professions are affected by bankruptcy:
- Company Directors
- Councillor (local government)
- Defence Force Personnel
- Electricians, Plumbers, Gas Fitters (but not if employed by someone else)
- Private Investigators
- Justice of the Peace
- Those with Liquor Licences
- Members of Parliament
- Real Estate Agents (Only those with a licence, not those operating under someone else’s licence)
- Second Hand Car Dealers
- Security Guards
- Tax Agents
- Licenced Travel Agents (not people working in a travel agency)
- Those with Gaming Licences
- This list is not exhaustive
Before filing for bankruptcy you should consult your professional body, governing body or HR department. Typically you can do this anonymously. In many cases you will be able to continue your profession with certain restrictions imposed during the banrkuptcy period. For example: if you are a Real Estate Agent you may be able to continue as long as you don’t control a trust account. But these conditions vary from profession to profession and state to state. Personal insolvency agreements allow a reduced payment as settlement but may have less impact on employment.