People hide the extent of their debts from their nearest and dearest. Some of our clients warn us that they have family members that are unaware of the situation. It’s a very difficult subject to broach.
But on top of this is the concern of employment. Can your manager find out? Can you get sacked for being in debt? What if you don’t want them to know?
Statistics from The Money Charity (formerly Credit Action) support the notion that debt isn’t uncommon – the average household debt in the UK is currently nearly £56k (including secured debt) – but despite this, there’s still a stigma attached to being in debt and a fear about how it could affect you.
There are very few jobs that require a pristine credit rating and unless you work in the financial sector – say in a bank or you’re a chartered accountant – it’s highly unlikely that your employer will ever carry out a credit check on you.
All county court judgements (CCJs) and administration orders are recorded on the Register of Orders Judgments and Fines, and all insolvencies can be searched for on the Insolvency Service website. However its very unlikely they would come across this information unless specifically searching for it and they would have to pay for detailed specifics.
What about bankruptcy?
In the past, as bankruptcy was advertised in the local newspaper, there was a good chance that your nosy neighbour might come across it by accident.
If this had continued there’d be more bankruptcy notices than news nowadays!
Nowadays bankruptcies are only advertised in the London Gazette (a trade publication) to inform the financial industry. Bankruptcies are only advertised elsewhere if it’s deemed in the interest of the public.
Your payroll department may be alerted through the fact that your tax code will change to 0 (you don’t pay tax while bankrupt), but there’s no need to explain this unless it’s explicitly stated as part of the terms of your employment contract.
What if I could lose my job?
If it is explicitly stated in your terms of employment that court action such as a CCJ would result in disciplinary action or dismissal there is loophole legislation called a Tomlin Order which can help. It may also be appropriate if court action would result in you losing membership of any professional associations.
If CCJ paperwork has been issued to you, this order would usually stop any further court action provided that you comply with the terms stated.
How does a Tomlin Order work?
You would need to instruct a solicitor to draw up a ‘schedule’. The terms have to be agreed by both parties (you and the creditor) and provided that these are adhered to, no further action will be taken. The fees depend on the complexity of the situation.
The terms are completely confidential and are not recoded on the Register of Orders Judgments and Fines. This could be a solution for anyone whose job might be at risk as a result of a CCJ.
You’re not alone
Whatever your reason for being in debt or for not wanting others to know, it’s important to remember that you’re not alone and there is help available. Debt Remedy will provide you with a tailored action plan to help you deal with your dets
And to answer the question we posed in the title, no, in most cases they won’t find out.