Financial services firms must control the risks they face. This is a regulatory requirement.
One area of risk is vulnerable employees. When people become vulnerable, the perception of risk increases. There’s a risk of financial loss. There’s a risk of poor work performance.
Debt problems can make people vulnerable. Firms may create policies to address this risk. They might run credit checks on staff. They might create disclosure requirements. Firms might add contract clauses related to personal insolvency.
Other types of employer control risk in similar ways. The police and armed forces are examples.
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A trust deed in Scotland is a type of personal insolvency. It’s an alternative to bankruptcy. These options are a last resort to deal with serious debt issues. They get recorded on a public register.
Becoming insolvent might cause an employer concern. They might perceive it to be a risk factor.
Banks often include contract clauses related to insolvency. Insurers and similar firms may do the same.
Check your contract of employment. Check your employer handbook if you have one. Look for references to insolvency, trust deeds, and bankruptcy. You might find you have disclosure requirements. You might find other restrictions.
Employer restrictions may not be the issue you fear. They aren’t always imposed. Talk to your union (if you’re a member). Ask them whether colleagues have entered trust deeds. We know of cases where employers have waived such clauses. Your HR team may also be able to help with this.
Disclosing your intention to enter a trust deed is sensible. This is a chance to gauge your employer’s reaction. It demonstrates integrity and honesty to them.
What if you owe your employer money? You might have a loan or credit card at your own bank. All debts must get included in a trust deed. It’s not possible to pick and choose.
The situation for brokers and advisers varies. Much depends upon your employment status.
An employed mortgage broker should check their contract. The firm is responsible to the regulator for controlling risk. They should have risk control policies in place. You’ll be subject to their rules and policies.
Financial advisers might be an appointed representative. Your network is responsible to the regulator for controlling risk. They should have risk control policies in place. You’ll be subject to their rules and policies.
Brokers and advisers might be directly authorised. The regulator checks your suitability to do this work. This will involve personal finance checks. Insolvency might result in restrictions to your permissions (or worse). The FCA expects approved persons to be financially sound.
Accountants get overseen by professional regulatory bodies. They set conduct standards for members. The standards set by each body may vary.
Members of ICAS must apply to Council for their case to get reviewed. This must happen within 14 days of entering a debt solution. Your case gets reviewed by The Investigation and Professional Conduct Enforcement Committee.
Each case gets dealt with upon its merits. The requirement applies to formal and informal debt solutions. Your continued ability to practice could get affected.
If you’re a member of a different body, consult them for guidance.
Protected trust deeds and bankruptcy aren’t the only debt solutions. There are two debt management options available in Scotland. They’re viewed as less serious ways to address debt concerns.
Debt Arrangement Schemes (DAS) are a formal option.
Debt management plans (DMP) are in informal option.
Both allow you to repay debt at a rate you can afford. No debt gets written off. There might be employer disclosure requirements.
For confidential expert debt advice, please get in touch.
