For many people, a Consumer Proposal is the answer to their prayers – a simple debt management system that allows them to pay off a manageable amount of their debt each month with the remainder being written off at the end of the repayment term.
However, many people worry about the effect a Consumer Proposal could have on their career or job prospects. For others, there is a sense of embarrassment about their employer finding out they have a taken out a debt solution.
The following article will answer some of the most frequently asked questions relating to a Consumer Proposal and employment matters. Please feel free to contact us and speak to one of our Financial Advisors if you have a question that is not answered below.
Does My Employer Have To Know If I Have A Consumer Proposal?
Not usually. Unless your employer is one of your creditors or you are in a profession where it is frowned on (see below), it is extremely unlikely for them to find out you have entered a debt solution.
Even though it is advertised in the local newspaper, so are many thousands of other notices and your employer would have to be reading it from cover to cover to find your name in among the thousands.
However, it makes sense not to discuss your financial position at work in case one of your co-workers mentions it to your boss in passing.
Are There Any Jobs That Do Not Allow You To Have A Consumer Proposal?
In some professions, a contract of employment will stipulate you are not allowed to be sequestrated or be involved in any form of insolvency, and it may be regarded as a disciplinary offence if you do so.
These professions include The Police, The Fire Service and sometimes also The Prison Service, but any job where you are in a position of trust or have a responsibility for handling money will have concerns about a Consumer Proposal.
Some professional bodies representing solicitors and accountants also have rules regarding their members being involved in a form of insolvency.
The concern relates specifically to being in a privileged position regarding access to information and money, and a large unmanageable debt could be considered to make your vulnerable to corruption or blackmail.
If you are a member of one of these professions and a Consumer Proposal is really your only option, it would be wise to check your employment contract and speak to your Professional Standards and/or Welfare team at your place of work before going ahead.
Could I Lose My Job If My Employers Find Out?
It is very unlikely you would lose your job if your employers found out, as it would not impact on your ability to do your job in most companies. If you were in any of the professions listed above or in a position of trust or have a responsibility for handling money, it would be wise to confidentially talk to someone at your work so you can receive advice about the most appropriate options.
Debt can affect anyone, including Police Officers, Firefighters, and Prison Wardens, so your employer should have dealt with the situation before and be able to give you advice.
How do I Know If I’m Not Allowed To Have One?
If your believe your employer will not allow you to be involved in any form of insolvency, there should be an appropriate ‘restrictive covenant’ clause in your employment contract.
If you are unsure if there is a clause, perhaps because your contract contains excessive legal jargon which makes it difficult to understand, talk to one of our Financial Advisors and they may be able to pinpoint the appropriate clause for you.
Do I Have To Be Employed To Have A Consumer Proposal?
No. If you are unemployed you can still get a Consumer Proposal but you must have someone who can guarantee the repayments for you, such as a friend or relative.
Can It Affect My Ability To Get A Job?
If you are considering applying to train in The Police, The Fire Service or The Prison Service, you will have to undergo a financial vetting process and may not be considered suitable to having a Consumer Proposal. It will almost certainly be the case for The Police, which is known to have a very strict financial vetting procedure.
However, it may not just members of these professions who experience problems with getting work. Sometimes self-employed council service contractors may be required to undertake financial vetting during a tendering process and having a Consumer Proposal is often frowned upon.
If this is the case, the council usually highlight this in their tendering brief documents so you will be aware in advance.
For many people, a Consumer Proposal is the perfect solution to the burden of unmanageable debt. However, if there is a possibility it could affect your career, it is important you get professional advice from one of Debt Advisors before taking the step.
CONSUMER PROPOSAL EXAMPLE
Example Unsecured Debts
|2||Credit card 1||$6,812|
Your Monthly Repayments Would Be
a Consumer proposal $748
(total contractual repayments)
a Consumer proposal $295
(total contractual repayments)
* Subject to creditor acceptance
* Payment subject to individual circumstances
* Credit rating may be affected
* Fees apply, subject to individual's circumstances.