Anyone who is concerned about debt will already know how it can affect their work. According to Citizens Advice, more than a third of people who don't have debt under control say that it affects their ability to focus at work. However, when a debt problem gets out of hand, it won't just damage your performance at work - it could end up meaning you lose your job.
So how can this happen? And what can you do to protect yourself?
Job huntingThere are two ways in which debt problems can hurt your career. The first can happen when you apply for a job. Increasingly, your employer will want to do some sort of background check. This is a legal requirement in financial services, and is common practice in certain public sector positions. However, it is slowly being adopted by an increasing number of other organisations. In the US, half of all human resources departments run these kinds of checks, so we can expect this trend to grow in the UK too.
There are a couple of reasons for this. The first is that employers use the logic that someone with a perfect record will be fundamentally more reliable than someone who sails closer to the wind financially. The second is that people with serious debt problems are considered more of a risk: there's a concern they may be more likely to steal from the business than financially stable employees.
If you are in the jobs market, therefore, it's worth applying for your public record report from someone like Experian. It will let you see exactly what the employers will be able to see. You can check you are on the electoral roll - and make certain that the address on your report is the same one you gave the employer. If there are other things that come up you can correct any mistakes, or make sure you address them in any interview.
Lose your jobHowever, even if you're not looking to change jobs, your debts could lead you to unemployment if they end up getting so out of hand that you have to declare yourself bankrupt. As we reported earlier, bankruptcy can hit almost every part of your life - you could lose your home and your car and your accounts will be frozen as all control of your money is handed to the courts. If you're very unlucky it could destroy your career too.
There are some professions who will not hire bankrupts - although in some cases they will hire those who have been discharged for three years. These include the armed forces and the police. If you are already in either of these organisations it could harm your career prospects, but you may be able to keep your job providing you speak to your superiors, and HR.
There are some jobs you are no longer allowed to do if you have been declared bankrupt - typically this will either be stated in your employment contract, or your employment will depend on membership of a professional body - which will be suspended while you are bankrupt. You cannot work as an insolvency practitioner or in the financial services industry. You cannot continue as an accountant or lawyer, and you cannot work as an MP.
You also cannot work for yourself as the director of a company without permission of the court, so bankruptcy should be considered very carefully by people who run their own business.
When debt problems get this serious, they can damage every part of your life, and your career is no exception. It should be enough to make us all pause for thought and think about whether we really have any debts under control.