Filing Bankruptcy or Consumer Proposal and your Job
A common question that many people have is whether or not filing for bankruptcy affects their job and their ability to get a job in the future. When it comes to your current job, in most cases, there should be no issues. In the majority of situations, you are not required to disclose your bankruptcy to your employer. Therefore, no one at your current job will know that you have filed for bankruptcy. However, some particular legal and finance jobs have limits on work you can do if you are an undischarged bankrupt. You may also find it difficult to become bonded, which is required for some jobs. However, these limits generally do not apply to those who file a consumer proposal.
In addition, these situations are unique and you should speak to your bankruptcy trustee for more details if you feel that they apply to you. In general, though, the Bankruptcy and Insolvency Act states that employers may not “dismiss, suspend, lay off or otherwise discipline” an employee who files a consumer proposal or bankruptcy.
When it comes to applying for jobs, you are again not required to disclose that you have filed for bankruptcy or consumer proposal. However, your potential employer can ask you to provide a credit report. If you allow this employer to look into your credit history, they will be able to see that you have filed for bankruptcy or consumer proposal. However, many jobs do not require a credit check. This is mostly common in positions where you are handling money or in other financial jobs.
Certain specifics apply when it comes to how bankruptcy affects your job. For example, you are not able to manage a trust account if you are in bankruptcy and have not been discharged. You can also not able to be bonded and certain professional organizations will not allow you to maintain membership if you file for bankruptcy. As mentioned above, with these specific issues, it makes sense to speak with a licensed trustee in bankruptcy who can fully explain how bankruptcy may affect your job.
Many of the above issues do not apply to a consumer proposal. Like a bankruptcy, a consumer proposal is a legal process. However, unlike a bankruptcy, a consumer proposal is a situation where you present your unsecured creditors with an offer to repay your debt on terms you can afford. A consumer proposal may involve increasing the amount of time available to repay the debt, reducing the amount that you are expected to pay back, or both. In many cases, you will offer to pay a portion of your debt in monthly payments over a specific period of time. Once you have made all required payment (and fulfilled all other duties required of you under the terms of the proposal) the remaining outstanding debt will be forgiven.
A consumer proposal is often chosen by those who are able to repay some of their outstanding debts, but not the full amount. Once you meet with a bankruptcy trustee, he or she will review your financial situation and let you know if a consumer proposal is an option for you. If it is and you decide to proceed with this option, your trustee will prepare the offer to your unsecured creditors and submit it. Your creditors will then have 45 days to decide whether or not they wish to accept your offer. If the majority of your unsecured creditors vote to accept the proposal, then all are bound by its terms.
Working with a Bankruptcy Trustee
Both bankruptcy and consumer proposal must be filed by a licensed trustee in bankruptcy. Most trustees provide a free consultation where they will review your situation and inform you of the options that are available to you. It is at this consultation where you can discuss any concerns that you may have regarding how consumer proposal or bankruptcy will affect your job or any jobs that you are planning on applying for in the future. If you have concerns or if you have a job that could be negatively affected by filing for bankruptcy, your trustee may be able to provide you with alternatives that allow you to reduce or eliminate your debt without hurting your employment situation.