Should your employer know if you are under debt counselling?

Preferring to keep your finances private from your employer is fair. Finances are personal, and most people don’t share that type of information freely. If you’re overly indebted you may feel even more strongly about not wanting to share your financial information. Perhaps you feel that it will cause employers to see you in a bad light, or it will have an effect on how they treat you at work. 

This begs the question of disclosing your debt counselling circumstances to your employer. If you’re under debt counselling, do you have to disclose it to your employer? Do they have the right to know?

The simple - answer is that it depends on what sector or industry you work in. This, however, is not a satisfying answer. Let’s look into the topic a bit further below. 

Disclosing your financial information

In most cases, your employer does not need to know about your debt counselling status. If you do tell them, it should be completely by your own will. If you feel that it will help you to manage the stress of work and finances, then you may disclose as much information as you’d like to whomever you like. 

Some employers, particularly in the financial sector, may want to do credit checks before employing you. They are only allowed to conduct this assessment with your explicit consent. If they do it without your consent, they are breaking the law, according to the National Credit Act (2007). 

Should you be worried about disclosing your information?

In the past, there was a major lack of understanding about debt struggles and debt counselling. As a result, employers would stigmatise applicants and were hesitant to employ people who were struggling with debt and those under debt counselling. 

In recent times, particularly after the National Credit Act was introduced, the drive to increase transparency around the process has resulted in it no longer being seen as a basis for discrimination, and therefore should not impact your current or future employment opportunities.

The National Credit Act also provides safety in this regard. In terms of The Act, discrimination against consumers who are under debt counselling is prohibited. So, if you are not given a job based solely on your debt review status, or if you are let go from a job based on your debt review status and nothing else, then your employer will be breaking South African law. As such, you will be able to take action against them. 

Are you looking for a job while under debt counselling? 

The job search process should not be altered by your debt counselling status at all. As explained above, employers are not allowed to discriminate against you based solely on this one factor. 

But below is what you should keep in mind about debt counselling and the job search. 

Employment credit checks 

Your debt counselling status may be brought up if your potential employer does a credit check on you. 

Companies are not prohibited by law from doing credit checks. However, they must have your explicit, written, consent to run this check. 

In addition, the job that you are applying for must be related to the handling of money or finances within the business. If the role is unrelated to those elements of the business, then they cannot do a credit check. 

Most organisations will not try to do a credit check unless they really need assurance for the role they are filling, as running credit checks can be costly and time consuming. 

A deeper dive: Jobs that relate to handling of cash & finances 

As mentioned above, an employer may do a credit check on you if the role you’re applying for is related to finances in any way. But why? 

People in the financial sector are expected to be savvy with money, financially responsible, and exceptionally competent in matters relating to cash and cash flow. This is because jobs in the financial sector are about managing a company's money. 

Your being under debt counselling, unfortunately, may call into question your ability to effectively fill the role. 

The personal stress of being in financial trouble 

Personal financial stress could have an impact on your ability to fulfil your responsibilities in the workplace. The mounting pressure of incessant creditor calls, judgements or payment default notices can only be avoided for so long. 

Once reality strikes, you may become vulnerable to mental or even physical health-related issues. If you are not able to pay back your debt and have not yet found a solution this may impact your ability to focus and perform at your job. 

If this is the case - then it may be in your best interest to (willingly) share your situation with your employer. They are more likely to be understanding and accommodating when they know what is going on. 

Debt Counselling could be the stress-relief process you need

Signing up for debt counselling opens you up to a variety of benefits. 

The process alleviates the stress associated with debt by taking care of your creditors, paying them an instalment you can afford, and liaising with them directly — freeing up your mental capacity to focus on your job and do the best you can!

In addition, if you’re under a registered debt counsellor, they can provide you with a letter explaining to your empower or potential employer that you are under debt counselling and that you are taking responsible steps to get yourself back on track. 

Advice to those applying for jobs while under debt counselling 

If you’re applying for a job, and you know they will run a credit check, then follow these steps. 

Access your credit score & know what your profile says 

Understand your credit score, how you landed up with that credit score, and what it means. You may be asked about it and you should be prepared to answer. 

Always recheck your score when to ensure it is improving as time goes on 

It’s good to have proof that you are working on your finances. It’s like having an extra tool in your arsenal. Checking your credit score regularly can provide you with that proof. 

Continue to improve your record by paying loans & bills on time 

Track your payments and accounts consistently. This way you’ll always remember to make payments, and your debt will steadily decrease. As a result, your credit score will increase. 

Common misconceptions about debt counselling & the workplace: 

1. Debt counsellors will never inform your employees about your current financial situation 

At DebtBusters, your situation is strictly confidential and treated with the utmost care. We will never take it upon ourselves to inform an employer about your debt status, however, we can provide you with a letter stating that you are under debt counselling, and inform your employer about the process upon your request.

2. Opening up about your debt counselling process is a bad idea 

Remember, opening up about debt counselling provides you with the opportunity to prove your dedication in taking charge of your debt situation. Simultaneously, it showcases debt counselling as the safe and responsible process it is, because your peace of mind and commitment will extend into your work - and it will show.

Speak to a debt expert today 

Contact us via our free call-back form to see if you qualify for debt counselling. We can help you through the challenges of debt, and the strain it places on your work life. 

If you are in need of financial assistance and are experiencing any of the above situations, call DebtBusters on 0869 99 0606 to speak to a debt expert who will be able to guide you through the process of applying for debt counselling.