How will bankruptcy affect your employment or income
Will bankruptcy affect your employment?
You can continue in current employment or seek new employment while you are bankrupt.
Under the Companies Act 1963, as amended, it is an offence for a bankrupt person to act in various capacities in relation to a company without the consent of the Court. These capacities include director, auditor, manager, liquidator or receiver of a company.
Certain professions may be governed by bodies where members’ personal finances are subject to regulatory requirements.
Will bankruptcy affect your income?
The Official Assignee will seek a contribution from your income after applying the ISI Guidelines on Reasonable Living Expenses.
These guidelines take a person’s family situation into account when calculating how much of his/her surplus income (if any) can be paid to the Official Assignee.
The High Court, in determining what, if any, contribution it may direct you as a bankrupt person to pay, may also have regard to the ISI Guidelines. This will typically take the form of an Income Payment Order and last up to 3 years and ideally should be agreed to at the earliest stage of bankruptcy. This is to ensure that you as a bankrupt person are subject to it for the shortest period possible after your bankruptcy has been discharged.
Social Welfare payments are not liable to be taken by the Official Assignee or the Court.
Can you still trade while you are bankrupt?
Yes, as long as you trade in the same name in which you were made bankrupt. If you trade in a name other than that in which you were made bankrupt without disclosing this name, you are guilty of an offence. You must notify the Official Assignee of any business or trade in which you engage.
How will bankruptcy affect business partnerships?
When a partner is adjudicated bankrupt, the partnership is automatically dissolved unless the partnership agreement provides otherwise. Partnership assets are first used to pay partnership debts and if there is any surplus remaining, they can be used to pay an individuals’ debts.
What happens to your pension?
Generally, your pension assets are not transferred to the Official Assignee. However, pension income receivable by you will be treated as income for the purposes of your bankruptcy. Approved Retirement Fund (ARF) and Vested Personal Retirement Savings Accounts (Vested PRSAs) may be included in your bankruptcy estate for realisation and payment to your creditors.
Where a bankrupt person has made excessive contributions to a pension scheme in the three years before being adjudicated bankrupt, the Official Assignee may apply to Court for an order to make the excessive amount available for distribution to the creditors.
If you have a pension entitlement that matures within 5 years of your bankruptcy order, the Official Assignee will have the right to claim it for the benefit of the bankruptcy estate.