Will an IVA affect my employment or my ability to get a job?

An IVA can affect certain employment

We receive a lot of calls and emails from the public asking; "Will an IVA affect my employment or my ability to get a job?".

If you are considering entering into an IVA, then it would be wise to check with the professional organisation that you are a member of first, to see if this will have an effect on your accreditation,

Likewise in certain jobs, being in an IVA can be contrary to the terms and conditions in your contract of employment. Make sure you check this to see if you would be affected.

Please note that in most employment or job scenarios the employer does not need to know about an IVA. An IVA is a private arrangement between you, your creditors and the IVA Insolvency Practitioner. The only people that will be aware of the IVA are your creditors. Some people don’t even tell their husband or wife about the IVA. The IVA is very different to bankruptcy as it is not advertised or published in 2 local papers and the London Gazette. Please note that your employer will not find out about your IVA unless you tell them.

IVA and job applications

You would need to check that to the contracts of employment or discuss the situation word with the HR or personnel department. An IVA does not generally effect employment what sort of jobs do you do, and what does the company actually do.

IVA - Employment in the financial sector

Please note that for professional people such lawyers, accountants and bankers, bankruptcy are not a viable option to deal with debts because bankruptcy can potentially limit your employability it would seem prudent to investigate these other options before deciding to declare.

Professionals who run into financial trouble typically opt for an IVA because if they choose bankruptcy they are not allowed to be involved in promoting, forming or managing a company without the permission of the court. They are also likely to lose professional accreditation if they work in careers, such as accountancy.

Quick Guide on Professional rules on going bankrupt or choosing an IVA

Employment - Barrister: Can not act whilst bankrupt so an IVA is preferable
Employment - Chartered Accountant: Can not act whilst bankrupt so an IVA is preferable
Employment - Member of Parliament (MP): Can not act whilst bankrupt so an IVA is preferable
Employment - Local Authority official: Can not act whilst bankrupt so an IVA is preferable
Employment - Justice Of The Peace (JP): Can not act whilst bankrupt so an IVA is preferable
Employment - Police or Armed Forces: Bankruptcy can severely hinder their career and promotion prospects so an IVA is the better option
Employment - FSA registered: Most jobs in the financial sector can become untenable if you are declared bankrupt so an IVA is preferable

IVA - Employment in the Accountancy, Legal and Financial Profession

The Institute of Chartered Accountants in England & Wales (ICAEW), as the largest regulator of licensed Insolvency Practitioners and Accountants in the UK states that IVAs have some clear attractions for debtors compared to bankruptcy. They carry less stigma than bankruptcy, for example, and do not affect the individual’s ability to work as an accountant, barrister or solicitor. They are also less public, as they are not advertised in the press.

What are the implications in terms of employment in the securities and Investment sector?

Even if someone has become personally bankrupt and wishes to work in the area of securities and investment, they may still be able to.

It is possible to trade again immediately, as your bankruptcy has been discharged, but you do have to disclose this fact to the Financial Services Authority (FSA) in the Approved Person Application (Form A).

You will be asked for details in the form, such as whether it was a solvent or insolvent liquidation, or if you've ever been the director of a company, if so was it as an executive or non executive directorship, what the Liquidators Report said of your responsibility for the liquidation, any responsibility you had for finance there and whether the new role will require you to handle client money or assets. The FSA will then make its own checks and decide whether you are 'fit and proper' for the new role.

This may sound daunting but there are a lot of Approved Persons who were the subject of bankruptcy or an IVA or directors of failed companies.

No one, however, can work as an Approved Person while being an undischarged bankrupt, but the FSA does sometimes approve people who have made a formal or informal agreement with their creditors. They don't normally like to do this if the bankrupt person was the senior manager or a large shareholder in a regulated company.

If you have decided to do an IVA and want to check if an IVA can affect your employment or your ability to get a job please complete the following form or telephone 0800 074 6918.

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IVA's

The IVA Guide
Money Advice Direct has put together an IVA Guide based on the enquiries and questions that we receive at our helpline offices.

In the guide we cover such subjects as IVA Approval, early settlment of your IVA, missed IVA payments, IVA failure, additional debt claims and much more.
[click here for IVA Guide]

What is an IVA?
The IVA is an extremely powerful tool enabling you to clear your debt and return to a clean financial bill of health. Visit Money Advice Direct's Guide to Individual Voluntary Arrangements (IVAs).
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Will an IVA affect my employment or my ability to get a job?

An IVA can affect certain employment

IVA and job applications

IVA - Employment in the financial sector

Quick Guide on Professional rules on going bankrupt or choosing an IVA

IVA - Employment in the Accountancy, Legal and Financial Profession

What are the implications in terms of employment in the securities and Investment sector?

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