How does employment law relate to bankruptcy

[james.m]

1.How does employment law relate to bankruptcy - can an employer terminate employment just because a person has gone bankrupt? How do most employers view personal bankruptcy in terms of continuation of employment ?

2. I have applied for a reduction in the originally suggested IPA - how likely is this to succeed ?.

3.An IPA has been suggested following my bankruptcy to operate for 3 years. I understand i will still obtain the discharge certificate after 12 months freeing me of all or most bankruptcy restrictions. If my income increases AFTER that or i receive a windfall [and assuming that the IPA payments are maintained uninterupted for the full 3 years at their original level] will the benefits of this at that stage i.e. after discharge be entirely mine even though nthe IPA continues for a further 2 years after discharge ?

[Skippy]

Hi James, I'm not an expert but I will try and answer your questions:

1. It all depends on your job, and the terms of your contract. There are some jobs that you are unable to do if you are bankrupt, e.g. company director, police officer, some financial jobs.

2. As far as I am aware it depends on the reason for requesting the reduction - has your income been reduced, or your living expenses increased?

3. I have been advised by the OR and Clarke Willmott who are handling my IPA that I must inform them of any change to my income during the 3 years of my IPA. However, if I understand correctly, if you come into an inheritance for example after you are discharged you can keep it, unless you knew you were going to receive it before you were discharged. If I am wrong about that I'm sure one of the experts will correct me!

Yesterday is history, tomorrow is a mystery, today is the present - a gift to make the most of.

View my blog at http://skippy13.blogs.iva.co.uk/

[MelanieGiles]

Skippy is spot on with her bankruptcy knowledge as ever!

Just to point out that in my experience most employers these days really are not bothered by employing people who are bankrupt or have been in the past.

If your income increases during the three years of the IPA, then you are duty bound to inform your Trustee of that and they may exercise their discretion to increase your payments. But if you receive a windfall after the discharge period it is yours to keep - and you can even use some of it to pay off the IPA in full early!

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[Skippy]

I take that as high praise from you Melanie!

I didn't realise that you can use a windfall to pay off your IPA early - not that I'm expecting one! I actually told my employer that I was going BR and he was really supportive. Even though it didn't actually affect my job I thought it was easier for him to know as I wasn't sure if I would get a nil tax code, and I also needed time off for the court and the OR meeting.

Yesterday is history, tomorrow is a mystery, today is the present - a gift to make the most of.

View my blog at http://skippy13.blogs.iva.co.uk/