When you’re battling debt, having a steady job is crucial. But what if you’re considering bankruptcy or a consumer proposal as a way out of the financial quagmire? This brings up a concern: Will bankruptcy or consumer proposal affect my employment?
The Impact of Bankruptcy on Employment
Does My Current Employer Need to Know?
Under normal circumstances, your current employer should not be alerted about your bankruptcy filing. Only in exceptional cases would your employer need to be informed, for instance, if you desire to halt wage garnishment.
Can Bankruptcy Cost Me My Job?
In Canada, it is illegal for employers to terminate employees simply due to bankruptcy. However, certain professions have code of conduct stipulations that may require disclosure of bankruptcy. These usually include professions where money management and trust accounts are involved, such as insurance/investment brokers, lawyers, or accountants.
Will Bankruptcy Affect My Chances of Getting Hired?
In most instances, bankruptcy should not hinder your ability to secure employment. Some employers might perform a credit check or insolvency search as part of their hiring process, particularly for positions involving financial trust.
What About Being Bonded?
If you declare bankruptcy, obtaining a fidelity bond might be more difficult. This is significant if your job involves handling client funds. Fidelity bonds protect employers against potential losses due to employee misconduct.
What Happens to My Salary When I Declare Bankruptcy?
In a bankruptcy, you retain your wages. Your Trustee doesn’t seize or control your income. However, you are required to provide a monthly income and expense report to your Trustee. This data is used to determine if your earnings exceed the government-set income limit in a bankruptcy. If you surpass this limit, you’ll be required to make additional surplus income payments.
The Impact of a Consumer Proposal on Employment
A consumer proposal, a debt repayment arrangement negotiated with your creditors, can be a less severe alternative to bankruptcy.
Consumer Proposal and Current Employment
Generally, a consumer proposal should not affect your current employment. However, if your job involves handling substantial amounts of money or you have a professional designation, it’s crucial to inquire with your professional body or employer if a consumer proposal could affect your standing.
Consumer Proposal and Licensed Professionals
Certain professionals must disclose a consumer proposal filing to their licensing body. For instance, a Chartered Professional Accountant (CPA) in Ontario would need to disclose a consumer proposal filing and the circumstances surrounding it to CPA Ontario.
Lawyers, human resources professionals, and Certified Financial Planners (CFP) have similar requirements. A CFP, for instance, must notify the Financial Planning Standards Council (FPSC) within 15 days of filing a consumer proposal.
Making the Right Choice
Consumer Proposal
Every individual’s situation is unique, and it’s essential to seek advice from a Licensed Insolvency Trustee. They can assess your financial circumstances and guide you towards the best course of action without unnecessarily affecting your employment.
In conclusion, while bankruptcy or a consumer proposal could potentially affect your employment, it’s typically not a cause for concern for most employees. However, if you’re in a profession with a professional designation, it is vital to check with your professional body.
