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Check how bankruptcy affects your job

This advice applies to Wales

Bankruptcy is most likely to affect your job if:

  • you run your own business
  • you’re a solicitor or accountant, or you work in the financial sector

If you have a different job, you might still find that bankruptcy causes problems for your employment, including:

  • you might find it more difficult to get a job in certain industries in the future, such as the civil service, the police or a security firm
  • your employer might place restrictions on the kind of work you can do

Generally, you don't have to tell your employer if you go bankrupt. However, you should check the terms of your contract of employment carefully to see if it says anything about you having to tell your employer if you go bankrupt. This is particularly likely to apply to you if you work in a financial organisation or role.

If you run a business

If you own a business when you go bankrupt, the official receiver takes over the rights to your business. This normally means:

  • the business is closed down
  • the employees are dismissed
  • the assets of your business are sold

If you have your own tools, you might be able to keep them - check which belongings you can keep when you go bankrupt.

Running a business after you’re bankrupt

If you're self-employed as a sole trader, you can start trading again. It's worth remembering that you'll find it very difficult to get credit. This is because bankruptcy stays on your credit report for 6 years from when you become bankrupt.

The people you do business with can check if you’ve gone bankrupt. They can search a public list called the ‘insolvency register’. Your name stays on the register until 3 months after your bankruptcy ends.

While you’re bankrupt, there are some restrictions on the involvement you can have in running a business. If you break any of these restrictions you'll be committing a criminal offence. They include:

  • you can't be a company director without permission from the court
  • you can't be involved in setting up, promoting or managing a limited company without permission from the court
  • you can be self-employed or trade in a partnership, but if you run a business under a name that's different to the one in which you were made bankrupt, you must tell everyone you do business with the name under which you were made bankrupt

You can check what to do if you’ve broken a bankruptcy rule.

If you’re a solicitor or accountant or you work in the financial sector

You might have to leave your job if one of the following applies to you:

  • you're employed in a role that involves financial matters, such as working in a bank, and your employer is unwilling to carry on employing you because of your bankruptcy
  • you're an insolvency practitioner - you would be banned from working in the role when declared bankrupt
  • you're licensed to carry out a specified role in the gambling industry, such as a dealer or croupier - your licence will automatically lapse when you become bankrupt, although you may be able to reapply to the Gambling Commission
  • you're employed in certain regulated professions that require you to be licensed or registered and going bankrupt would disqualify you as a member of your professional body - this applies to some profession like law, accountancy, financial services and banking

If you're in a regulated profession, you or your employer might have to tell the regulator you’re bankrupt. If you’re not sure, ask your HR team or union.

The official receiver might also tell the regulator or professional body, if this is relevant to your membership.

If you’re dismissed because of bankruptcy

Your employer has to treat you fairly. It might be unfair dismissal if your employer dismisses you unreasonably or without following a reasonable procedure.

You can check if your dismissal is unfair.

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