Bankruptcy and Your Employment

Being in financial distress or insolvency can put a strain on your well being, relationships and social life. This will pass over time with the right financial management. However, your employment situation or ability to find a new job is an area that shouldn’t be affected by going through bankruptcy.

It’s unlikely that your employer or colleagues would have any idea about your financial circumstances so it’s pointless to stress needlessly. There are a small number of unusual cases in which an employer may be made aware of your bankruptcy, but the AFSA advises that this is rare.

It’s also worth noting that having declared bankruptcy, you’re obligated to keep your trustee updated on any significant changes to your situation (such as a new job or a pay rise). You can seek reputable financial advice at the same time to make sure you’re meeting your obligations while protecting your best interests.

Bankruptcy and Running a Business

If you’re the owner of one of Australia’s nearly 600,000 small businesses or one of the nation’s 1.2 million sole traders, chances are nothing in your business will change as a result of your filing for bankruptcy.

However, there are rules you’ll need to abide by, and it’s your job to make sure that your business activity is compliant. For disclosure, it’s important that your full name is featured in your business name —which means you’ll show up in search results in the National Personal Insolvency Index, fulfilling one of your obligations.

Bankruptcy and Directing a Company

For the 3-year term of your bankruptcy, you won’t be able to be a company director. Being bankrupt can also preclude you from a senior management position within a company for the 3 years. There are ways to appeal this through a court. ASIC is a good point of contact for general information related to insolvency and company structures.

However, depending on the background and structure of your particular company, you may find that your questions and concerns are better addressed through working with an independent insolvency consultant.

You can find out more in a free, confidential call with one of our experienced insolvency experts. Give us a call and we’ll set you on the right path to manage your situation.

* The information on this page should not be taken as legal advice