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State by State Employment Restrictions for Bankrupts

State by State Employment Restrictions for Bankrupts

Becoming bankrupt can be a challenging time in anyone’s life and makes it easier to stress about your future prospects. After going through bankruptcy, you might wonder if it might impact your ability to earn money or run a business.
Fortunately, the Bankruptcy Act of Australia doesn’t stop you from being employed or even running a business. But there might be restrictions on certain industries or titles, like where the work needs a license from industry or government body.
It is essential to be aware of these restrictions and consult with a professional to avoid further problems. Let’s have a closer look at employment restrictions for bankrupts.

Categories of Employment And Business Restrictions For Bankrupts

The Australian Financial Security Authority doesn’t inform any employer when an individual goes bankrupt. However, it is important to keep in mind that this doesn’t prevent your existing or potential employers from inquiring whether you are bankrupt or stop them from searching the National Personal Insolvency Index.
While the restrictions aren’t imposed on all industries and jobs, certain licensing authorities and industry associations might have specific restrictions that you must be aware of. These restrictions mostly fall under two categories, which are as follows:

  1. The first kind of restriction is the one that imposes a mandatory ban on bankrupts to take part in a particular occupation. That is, if you have been bankrupt for a specific time frame, you can’t be employed in that particular occupation. Some examples include security agents, Justice of Peace, Members of Parliament, and Bankruptcy Trustees.
  2. The second kind of restriction is the one where bankruptcy might become a reason for restrictions on employment. Suppose you have been bankrupt but can convince them to relax this restriction in your individual case or bankruptcy. In that case, it can become one of the many factors being considered to determine if you are eligible to participate. One example is the taxation agents’ regulations.

However, there is inconsistency throughout the occupations as each industry has its own specifications, for instance, regarding the time length of the bankruptcy and the scope of discretion of the decision-maker. You have to consult a specialist or discuss it with your employer to determine if there are any restrictions or requirements you would face in your particular industry.
Generally, the restrictions are as follows:

• An individual who has gone bankrupt can’t manage or monitor a trust account. For example, an accountant or a solicitor.
• Some restrictions are imposed by licensing or professional bodies in specific professions and trades.
• You can’t be a director of any company as per the Corps Act.
• You can’t be involved in a Self Managed Superfund as per the Superannuation Act (SIS).
• You can’t manage an organization without receiving the court’s permission.
• You can run a business, but there might be certain restrictions if you are a sole trader. For instance, if the name of the business doesn’t include your name, you would have to inform any party you deal with about your bankruptcy. If you incur debt, you may have to disclose your bankruptcy regardless if the debt exceeds $5,000.

There might be some restrictions or limitations in occupations where you have to deal with other people’s money in an unsupervised arena.

State By State Employment Restrictions For Bankrupts

While there are certain employment restrictions on continuing certain professions and trades, these might differ from state to state. You must consult a professional bankruptcy agent or a relevant government agency to determine how being bankrupt would impact your employment under the Bankruptcy Act.

Here is a list of professions or trades in different states by the Australian Financial Security Authority (AFSA) that might have certain employment restrictions:

Click Here For a Full List of Employment Restrictions from AFSA

Keep in mind that if your profession or trade is mentioned here, it might not necessarily mean you can’t continue working in your profession. You would have to get in touch with relevant authorities to determine your next steps.

Wrapping Up

Becoming bankrupt doesn’t stop you from working or running your own business. There is also no limit to the income you can earn or save while you are bankrupt. However, there are certain restrictions that you might face that have been highlighted above.

Therefore, it is important to consult a professional bankruptcy advisor to ensure your employment or business goes smoothly throughout your bankruptcy, and you don’t have to face any problems. If you have any questions about bankruptcy, get in touch with Bankruptcy Advisory Centre today https://bankruptcyadvisorycentre.com.au/contact-us/ or call or text us on 1800 634 016.

Reviews

  • As a Trustee in Bankruptcy, Ross Thomson is often required to think outside the box. As well as creative thinking, Ross brings compassion to the table.

    For Ross, it’s important to see the people behind the financial problem –not just numbers.

    Ross recently helped a bankrupt client who lives in a retirement village with her seriously ill husband.

    The unit she & her husband live in is not owned by them, but subject to a 20-year lease.

    The money to be repaid by the management was due only at sale, when the client finally left the retirement village.

    Sale of the unit was likely to take several years &, if he did sell the couple’s unit, Ross realised he would be effectively evicting them from their home, without resources or family to help them.

    Ross decided to contact the retirement village management & put a proposal to them that they prepay some of the moneys they would otherwise pay the client.

    The village management considered the proposal & have agreed to prepay some of the moneys otherwise due.

    The client is relieved that she will not be evicted & can now concentrate on helping her husband through his health issues.

    The moneys paid represented about 75% of what would have been available to creditors if they waited two years.

    It is a win for the client and for the creditors.

    Melinda
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