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Bankrupty and job terminiation

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Hi Guys,
I'm looking at going bankrupt as this whole Corona Crisis has shown me, how I will never be able to pay off my debts. I owe £30,000, have no assets, 2 children, single parent and work as an insurance advisor. I have stripped back all of my non-essentials and changed suppliers where I can and my monthly outgoings with food is £1760 per month if I include my credit card debt it is another £500 per month. My income is £1900. Obviously, this can't continue and I have sought some help with regard to my debts and I know what my options are now. 

However, if I went bankrupt in my contract it states, immediate termination if  

(a)         is declared bankrupt or makes any arrangement with or for the benefit of her creditors or has a county court administration order made against her under the County Court Act 1984; or

I obviously can't lose my job in the current climate, but equally, I can't see any way out of my debt situation unless I go bankrupt. Do I have to tell them? I have never had a bankruptcy check and only work as an advisor so Im not high up in the company. Any one been in this situation?

Comments

  • John_
    John_ Posts: 925 Forumite
    500 Posts Name Dropper
    It won’t only affect your current job, it’ll exclude you from quite a lot of jobs in finance permanently.

    Are you able to take on more hours, or find a job that pays more?
  • mwarby
    mwarby Posts: 2,049 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    It would seem that the term you have identified excludes bankruptcy and IVA, and could arguably exclude a DMP

    income £1900
    expenses £1760
    left for debt £140

    a DMP to repay 30k if interest was frozen would be 30k/140 = 307 months or 25 years

    perhaps economies could be made to increase that, but could you manage that for an extended period ? realistically I can't see a DMP and by extension a debt consolidation loan working, this leaves formal insolvency as the only practical option

    potentially if you went bankrupt you would get an IPA of 140 (maybe more or less depends on your budget) which would mean repaying around £5k. An IVA would have a longer payment period and would probably see you paying £8400

    Regarding wether you tell your employer, I would suggest that it would look much worse if they found out (your name would be on a public register and you'd probably get an NT tax code) than if you tell them. It's quite possible that while they reserve the right to terminate, they have options. If you work for a large company can you ask HR on an anonymous basis, or do you have a union you can ask ?

    It's likely that although you consider an advisor to be a lowly role, others will see it as an important role offering financial advice presumably to the public. Many would question the validity of the advice coming from someone who is unable to run their own finances. There may also be concerns is yiu work on commission (although IMHO less valid once bankrupt) that your situation increases the risk of miss selling
  • Levart
    Levart Posts: 3 Newbie
    First Anniversary First Post
    Thank you for your answers. Do you get a new tax code if you go bankrupt then??
  • mwarby
    mwarby Posts: 2,049 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Normally yes, as the tax for that tax year is treated as a bankruptcy debt. This is done by changing your tax code to NT(not taxed)
  • Minkym00
    Minkym00 Posts: 791 Forumite
    Sixth Anniversary 500 Posts Name Dropper
    mwarby said:
    Normally yes, as the tax for that tax year is treated as a bankruptcy debt. This is done by changing your tax code to NT(not taxed)

    Only if the individual actually owes any money to HMRC, and most PAYE employed don’t (or minimal amounts) as they are taxed at source. 

    OP - it is a quirk of the rules that a bankrupt has a nil tax code applied for the remainder of the tax year, or until they get a new job (whichever’s first). The additional funds that you then have from the benefit of an NT code are then claimed by the OR. Although if you are dire financial straits (bearing in mind you no longer have any debts to pay so this is difficult to argue) would you be allowed the keep the additional funds. 
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