The income you need to pay off your debts means you must be able to hold down a job or keep your business on track, but that’s hard to do when debt affects every part of your life, from your relationships with co-workers to your job performance. While a debt solution like an IVA sounds ideal, could it affect your prospects for earning money? Could you lose out on promotions or sales because of an IVA, or perhaps be turned down for a new job if a credit check was carried out?
Over the years we’ve dealt with a lot of worries people have about employment prospects when on an IVA, and here is a selection of the most common ones:
Does an IVA affect my job?
First of all, it is your decision whether you tell your employer about your IVA. Most jobs do not carry out regular credit checks and if they did, they would need your express permission to do so. In most cases, an IVA would not affect your job. The only times we have seen this have a negative affect on your job is if someone is in a role such as insolvency practitioner, accountant or banker. In most of these cases as long as you receive permission from your employer, it isn’t a problem. What employer wouldn’t want their employee to take sensible measures to avoid bankruptcy?
Will having an IVA stop me being selected for a job?
Your average job doesn’t have strict financial vetting procedures that would stipulate having an IVA is undesirable, but there are some jobs and contracts that do. The Police, Fire Service or Prison Service certainly do, as do positions with fiscal responsibility such as an accountant or solicitor. All have strict financial vetting procedures, but for your average job credit checks aren’t completed. If your new job is an internal promotion, it would be very uncommon to start running financial checks on you to see if you are suitable. If the new job is external, some places run credit checks and some don’t. It all depends on the company and mainly the industry they are in. Your new job will have to request your express consent to run a credit check, so you would have plenty of notice. We would recommend always being upfront and honest with your new job, I am sure they will understand! You can read our IVA FAQ to see which debts can be included in your IVA and to check if these would affect your employment.
Does an employer have to know about your IVA?
There are no rules within IVA legislation that says an employer must know about an employee with an IVA, unless it is clearly stated in your employment contract. Some professions have strict rules about IVA’s and it would be a requirement of your job that you would not to be declared insolvent, so you would have to let your employers know what was happening if you wanted to go down this route.
What are IVA employment restrictions?
These are restrictions that your employer may place on you if you enter into a voluntary arrangement. In most industries, there won’t be any restrictions but it would make sense to check with an advisor as each job can vary.
Could I face a disciplinary or even lose my job?
It is unlikely that having to tell your employers you need to undertake an IVA will result in you being disciplined or losing your job. It’s more likely to happen if you hide the IVA and are discovered if it stipulates in the your employment contract the need for your employers to be told straight away. Your attempt to deceive them will cast you in a poor light.
Professional Standards or Welfare teams are becoming more common in businesses with these types of strict employment contracts, so you may be able to speak to someone there in confidence and get ideas and suggestions on how to tell your employer.
Could my IVA be discovered by work colleagues?
No-one, not even your work colleagues, will know if you have an IVA. There are no announcements published in local media or national financial newspapers. Only if they specifically search for your name on the Insolvency Register will they find out.
If I am unemployed, can I get an IVA?
Yes you can, as long as you have a regular income and are willing to pay a minimum of £80 per month into your arrangement.
I am very familiar with The Civil Enforcement Association and the High Court Enforcement Officers Association and I have written extensively on Financial Services matters.
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