Will a Bankruptcy Check Affect My Employment?

Declaring bankruptcy is something that people never want to have to do, but it can be a vital step in helping those in financial crisis to get back on their feet. Part of the reason it’s the last resort for many is the wide-reaching implications of bankruptcy, affecting many different areas of life, including employment.

Many companies and businesses use pre-employment checks via a third-party provider such as Eurocom CI, which, depending on the sensitivity of the company’s data, could include financial checks. Our background check experts understand how stressful looking for employment during or after bankruptcy can be, so we’ve created a guide to exactly how a bankruptcy check may affect your potential career, and the rules and regulations in place to protect both parties.

How Does Bankruptcy Affect Employment

Bankruptcy and employment don’t always cancel each other out; there are plenty of areas of work that don’t require financial checks, so your career isn’t over. However, it can affect the sectors or industries that you work in, as specific industries require financial and bankruptcy checks before employment can begin. For example, if bankrupt, you cannot be a:

  • Company director
  • Chartered accountant
  • Solicitor
  • Member of Parliament
  • School governor
  • Estate agent
  • Post office worker
  • Charity trustee

It also may be challenging to get a job in the police force, civil service or any security role due to the high level of protection and risk assessments that need to be undertaken to work successfully in these roles.

What if I File for Bankruptcy Whilst in Employment?

The issues that affect jobseekers when they file for bankruptcy don’t apply in the same way to people who are currently employed. 

If you are already in employment when you are declared bankrupt, your employers are unlikely to be informed. However, it is essential to check your contract to determine whether bankruptcy might restrict your role because some positions require a clean credit rating.

Effect of Bankruptcy on Business Owners & Self-Employed Workers

Due to the large amount of financial information that self-employed workers or business owners need to deal with, specific rules and regulations must be followed once the bankruptcy process has begun.

If you own a business and are declared bankrupt, the bankruptcy trustee assigned to you will be placed in charge of the company and close it. All employees of your business will be dismissed, and any assets will be sold. Business owners have various further restrictions in place once they have been declared bankrupt, including the possibility of criminal charges if they take on specific roles post-declaration. For example, anyone with a history of bankruptcy who wants to become a company director needs permission from a court. If this doesn’t happen, they cannot be involved in founding, managing or promoting a limited company. 

Being self-employed is slightly different to being a business owner, as you can begin to trade again immediately after filing for bankruptcy. However, it will be more challenging to get credit due to the process involved in bankruptcy, making it tougher to trade in certain sectors. You must also inform all parties that you do business with that you have previously been declared bankrupt, give them your previous trading name, and share the dates of when the bankruptcy took place.

The Facts of Bankruptcy Checks

As bankruptcy is a process that no one wants to have to go through, it’s common to be tempted to try and hide your declaration, especially if you’re scared of not being able to find work because of it. However, as previously mentioned, several career paths require a bankruptcy check before employment, which will always uncover a previous bankruptcy declaration. Therefore if a role you’re interested in wants to know your financial status, make sure to not lie in your application.

Your declaration will come up during a bankruptcy check because your name will appear on the insolvency register until the bankruptcy has ended (a process that usually takes around a year) and then for 3 months after that as well. Separately to this, your bankruptcy will also appear on your credit report for at least 10 years after your declaration, which, as shown above, will affect your ability to be employed in specific roles or get credit.

Bankruptcy Check Company

Our team here at Eurocom CI are skilled in completing financial checks against the numerous recognised standards, including BS7858, BPSS, FCA and SMCR. We also provide other forms of pre-employment screening as well as bespoke services for financial companies. If you’re interested in learning more, please contact a member of our team today.