Expert Debt Advice
Regulators demand that financial services firms control risk.
Some banks and other firms see vulnerable employees as a risk. Money problems can leave people vulnerable. The impact on mental and physical health can be serious. There’s concern about poor performance and the risk of financial loss. Employers worry that a vulnerable employee might make poor decisions.
Firms attempt to mitigate risk using policies and procedures. Your contract might require you to disclose financial problems. You might have to consent to employer credit checks. Your contract or handbook might contain a bankruptcy or insolvency clause.
This can make dealing with debt complex, but it is still possible.
Debt management is an informal way to deal with your debts. It’s not insolvency and no public register exists. It’s typically less damaging to your credit rating than insolvency. This appeals to some bank and financial services staff. Contract restrictions are less likely to apply.
A debt management plan reduces your repayments to an affordable sum. You continue with the plan until the debts get cleared. Your creditors are asked to suspend interest and charges.
In Scotland there’s the debt arrangement scheme. This works like debt management plans, but provides extra guarantees. This scheme is not insolvency. It is recorded on a public register and your credit file.
If your debt is large, these solutions might run for an extended period.
There are three types of personal insolvency (outside Scotland). These options get used to deal with serious debt problems. They’re recorded on a public register and your credit file.
In Scotland there are two types of personal insolvency. These options get used to deal with serious debt problems. They’re recorded on a public register and your credit file.
Personal insolvency might get seen as a risk factor by employers. Insolvency is more likely to be subject to contract restrictions. Check your contract of employment before going ahead.
Banks contracts often include personal insolvency clauses. Other similar firms, like insurance providers, may do the same.
Check your employment contract and handbook. Look for references to personal insolvency or bankruptcy. Restrictions and/or disclosure requirements may exist.
Contractual restrictions aren’t always imposed. Talk to your trade union if possible. They may be aware of colleagues that have entered debt solutions. We’re aware of cases where contractual restrictions got waived. Another option is to contact the Bank Workers Charity for support.
Debt management plan restrictions are less likely. However, check in advance before you proceed. We’ve helped a number of bank workers start a debt management plan.
Your employment status affects your debt management options.
Employed financial advisers should check their employment contract. The employer has FCA risk control obligations. Your employer’s rules and policies are the most important factor.
Mortgage brokers might be an appointed representative. The responsibility to the FCA rests with your network. You’ll be subject to the network’s risk-control policies.
Directly authorised advisers are subject to FCA rules. They confirm your suitably to practice. Checks on your personal financial status are likely. Insolvency might result in restricted or cancelled permissions. The regulator expects you to be fit and proper including financial soundness.
We’ve handled debt management plans for brokers and advisers. They’ve continued to practice. Regulatory or employer disclosure may be required.
Accountants are members of regulatory professional bodies. These bodies apply conduct standards for their members. These standards can vary from body to body.
For example, the ICAEW offers advice about debt to its’ members. Bankruptcy will result in an automatic loss of membership. Entering an IVA or DRO creates a liability to disciplinary action. This will not always result in a loss of membership. There is no requirement to report a debt management plan.
If you belong to a different body, check with them for relevant guidance. Reading our in-depth solicitor advice page may also be helpful.
Expert Debt Advice
For expert confidential advice about debt, please contact us.
We’ll provide you with advice about your options. We can help you to start a debt management plan.
Author: Andrew Graveson – Qualified Debt Adviser & Bright Oak’s Founder
Page Last Updated: 23/09/2019