In most cases, a person’s job or career will not be affected by them entering into an IVA (Individual Voluntary Arrangement). There are no laws in place stating that an employer must be informed when an employee enters into an IVA, and in most cases, no checks are done to discover the financial status of an existing or potential employee. However, this doesn’t mean that there are no circumstances in which entering into an IVA will affect a person’s job.
In some cases, it will be written into the employment contract that becoming insolvent will affect your existing employment. Whether that means that you can no longer practice, or simply that certain conditions need to be met so that you can continue your current role, depends on the specific contract.
What Jobs Could Be Affected By An IVA?
The people whose jobs could be affected when they enter into an IVA are generally employed in industries that require them to handle or give advice about money. Examples include:
- Bankers
- Accountants
- Solicitors
- Lawyers
- Financial Advisers
- Property Conveyancers
- Insolvency Practitioners
This is not an exhaustive list, and if you are concerned about whether your specific job may be affected when you enter into an IVA, you should check your employment contract, speak to your trade union, or speak to your company’s HR department confidentially.
How Will An IVA Affect My Own Business?
As a business owner, you are not prevented from entering into an IVA, and many business owners have been able to stay in business thanks to the help of an IVA at the right time. If you are the director of a company, unlike during bankruptcy, you are usually able to hold your position, but it is best to check the Articles of Association of your specific company before looking into an IVA for yourself.
If you are self-employed, you are able to enter into an IVA, but you will likely need to provide in-depth documentation, such as income, expenditure, and a cash flow projection, in order to prove that you can sustain your business throughout the term of your IVA. Your suppliers, if included within the IVA may also restrict future credit lines with them so it’s important to understand whether this will impact your ability to continue to trade.
Will An IVA Affect My New Job Application?
Unless you are applying for a job in the financial sector or certain public service sectors, it is unlikely that being in an IVA will affect the outcome of your job application. Most companies do not do credit checks on potential employees – unless they will be handling money – and they cannot do one without your permission.
Should I Tell My Boss About My IVA?
Although your details will be on the Individual Insolvency Register, which is a public record, it does not detail the specifics of your IVA proposal – such as the level of your debt, the reason for your financial difficulties or the monthly payment terms, which remains confidential between you, your Insolvency Practitioner and your creditors.This means that you can keep the details of your financial problems to yourself if you are already employed, unless your employment contract states otherwise, but we would always advise honesty when it comes to your employer.
Telling your employer that you are entering into an IVA is usually a good idea, especially if you have a good relationship with them, and trust them to be discreet and non-judgemental, as it may give them an understanding of what you are going through on a personal level. You may find they are more supportive than you would have previously imagined.
If you are struggling with debt and considering entering into an IVA, please contact our non-judgmental team at Debt Movement for caring and understanding debt guidance and solutions.
