When the National Credit Act (NCA) debt review in 2007, employers who did credit report checks on their employees did not fully understand the process. This ultimately led to a false perception of debt review within the workplace. However, debt review does not affect your employment at all. In fact, employers and creditors often see debt review as a positive.
If your future employer does a credit check, they will see that you are actively taking care of your financial situation. However, if you have unbearable amounts of debt, they may assume that you are not dealing with your financial problems.
How will debt review impact you in the workplace?
Most employers today understand and respect that debt review is voluntary and a proactive approach to your financial problems. Therefore it won’t impact your employment in any manner. If you’re under debt review you’ll still be employed and you’ll still be able to apply for jobs if needed.
What happens if you lose your job while under debt review?
To qualify for debt review you have to earn an income. In the event of income loss, it’s a good idea to notify your debt counsellor immediately as it is his responsibility to communicate this with all your creditors and to arrange for any provisions to be made.
Credit Life insurance can help in case of a retrenchment, which could cover instalments for up to 6 months. However, you’ll need to contact your debt counsellor who will make arrangements on your behalf.
Under debt review, while job seeking
You will not be at a disadvantage when exploring job opportunities while you’re under debt review. If you are over-indebted, it is in your best interest to show potential employers that you are managing your financial situation. A credit check may negatively impact your potential of being hired if you have defaults and judgements showing up on your credit report.
Being under debt review similarly should not have any impact on your ability to keep a job. If necessary your debt counsellor could provide a letter explaining that you are under debt review while informing your employer about the process.
If you are struggling to afford all your monthly expenses and debt repayments, you may be over-indebted. Leave your contact information below and one of our senior consultants will contact you as soon as possible.