Everyone needs to work, and bankruptcy does not stop you from doing so. For some people though, bankruptcy can have an effect on their employment, which means that they may have to make some changes in order to keep an income coming in.

The main way in which your employment will be affected if you go bankrupt is if you are running a business in the form of a company or sole trader/partnership. You cannot be a director of a company if you are bankrupt, which would mean that you would have to dissolve the company, or have someone else appointed as a director and you continue on as an employee. If you are operating as a sole trader or in a partnership, you might have to change the way that you run your business. There will be an effect on your ability to gain credit, and any existing partnership would need to be dissolved and a new one set up. For more information on running a business as a bankrupt person, see this article

Another way in which your employment could be affected is if you need a certain type of licence to work, such as for gaming or security. In order to determine if your particular licence will be affected, you need to contact the relevant licensing authority. Generally speaking, they will assess the situation on a case by case basis and decide whether or not you can keep your licence for the period of your bankruptcy.

Finally, there are certain positions with certain organisations that could have a “no bankruptcy” clause in their employment contract. If you are an accountant or a lawyer, or maybe work for a bank, you might be particularly vulnerable. You should consult your employment contract and make a call to your HR department if you are concerned that you might lose your job if you are declared bankrupt.

If you think that you are facing bankruptcy and are worried that it will affect your employment, you should call us at the Australian Bankruptcy Service straight away. Sometimes there are alternatives to bankruptcy that will not affect your particular type of employment as seriously. We can assess your situation and inform you of your options, and ensure that you are fully informed about whatever is likely to occur. Call us today on 1800 462 767 for obligation-free advice.