Does Being on Debt Review Affect Employment?

Does Debt Review Affect Employment?

In most cases, debt review does not directly affect your current employment. However, certain industries, such as finance or those requiring security clearance, may conduct credit checks.

Are you concerned about how debt review might impact your job search or current employment? 

This comprehensive guide provides clear and straightforward information to help you understand your rights and options.

Use the index to easily find answers to your specific questions, so you can confidently manage both your career and financial recovery.

Table of Contents

• Understanding Debt Review in South Africa
• Can Debt Review Affect My Current Employment?
• Will Debt Review Affect Your Job Application?
• Can Employers Check if You’re Under Debt Review?
• Which Careers May Require Credit Checks? 
• Your Professional Reputation During Debt Review
• Tips for Handling Debt Review When Applying for Jobs

Understanding Debt Review in South Africa

Did you know that the National Credit Act which was implemented in 2007 protects employees undergoing debt review?

Your Debt Review Status: The decision to inform your debt review status to your employer is a personal one, guided by your specific financial situation and the nature of your workplace. 

Your Legal Protection: The National Credit Act of 2007 provides protection for your privacy and rights. This ensures that you are not legally obligated to share your debt review status unless necessary regarding the specific job you are applying for. 

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Can Debt Review Affect my Current Employment?

In most situations, debt review does not directly impact your employment. Employers generally don’t consider a current employee’s debt review status.

• Discrimination: While you are undergoing this process, debt review should not be used as a reason for employers to discriminate against you. 
• Termination of Employment: Employers cannot terminate your current employment solely because of this and it is deemed illegal if they do so.   

However, there are certain factors to take into consideration regarding the different types of careers in South Africa and how they might view your current debt review status.  

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Will Debt Review Affect a New Job Application?

When you are applying for a typical job, such as roles in customer services, administration, retail or various other non-financial sectors, being under debt review should not present a major issue. In these sectors most employers do not perform credit checks as part of their hiring process. 

What to keep in mind when applying for these positions:

• Employer Hiring Practices: There are many regular positions that focus solely on your skills, experience and whether you will be an asset for the company rather than your financial history. 
• Focus on your Strengths: While you are in the job interview, focus on your qualifications and how you can positively contribute to the company. Even if you are under debt review it is unlikely to be a topic of concern for most employers in the non- financial sector. 
• Disclosure: If the debt review topic does come up in the interview, you don’t have to tell them, but it might be seen in a positive light if you do. If you decide to disclose your debt review status, explain that you are actively managing your finances and taking all the necessary steps to improve your current situation. 

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Can Employers Check if You’re Under Debt Review?

Employers do not have automatic access to your financial information.  If a position requires a credit check, employers can see that you are under debt review if they run a credit report. This is common in financial sectors, high security roles, or jobs that involve handling sensitive financial information.

Key points to take note of:

• Employer Consent: Employers need your consent before conducting a credit check. They cannot do so without informing you.
• Legal Protection: Being under debt review cannot be used as grounds for rejecting a candidate in most industries, unless the job specifically requires financial oversight.
• Be Transparent: If you are aware that a credit check is part of the hiring process, it may be helpful to inform the employer ahead of time about your debt review status to avoid surprises.

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Which Careers May Require Credit Checks? 

The financial sector or positions requiring security clearance, employers might conduct credit checks as part of their background screening process. 

Credit checks must adhere to the regulations set out in the National Credit Act. Employers are required to show a legitimate reason for conducting these checks, typically for roles that involve handling finances or financial responsibilities.

1) The Financial Sector Careers

Careers in banking, finance and accounting will require a clean credit history. Employers in this sector may view your debt review status as a potential risk, especially if the role you are applying for involves handling sensitive financial information or important financial responsibilities.

• Even if you are under debt review this should not automatically disqualify you, but it can be a factor of the company’s hiring decision. 
• By demonstration your responsibility and being honest and transparent regarding your debt review status, can still work in your favour. 

2) Security Clearance Roles 

• Any position that involves handling of sensitive information or may require high levels of security clearance might involve stringent credit checks but only with your permission. 
• Always communicate openly and provide clear context to this potential employer regarding your debt review status and the steps that you are taking to lessen any concerns they may have.

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Your Professional Reputation During Debt Review

Many people worry that being under debt review will harm their professional reputation. Entering into debt review shows financial responsibility, not failure.

Your Current Employer:

While you are not legally required to share your debt review status with your employer it might be beneficial especially if the stress is impacting your work performance. 

• Most employers may appreciate your honesty and will be more understanding and supportive of your current situation. 
• There are companies that provide Employee Assistance Programs (EAP) that might include financial counselling and various forms of support which could assist you while you are in the process of debt review. 

You are Demonstrating Responsibility: 

• When you made the decision to enter into debt review you are clearly demonstrating that you are committed to resolving your financial issues. 
• This will reflect positively regarding your character and decision-making skills towards your employer or potential employer. 

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Tips for Handling Debt Review When Applying for Jobs

If you’re under debt review and worried about how it might impact your job search, here are some practical steps to take:

• Be Honest and Upfront: If you think that they might do a credit check, it’s better to be open about your debt review status rather than waiting for the employer to discover it. Being honest can build trust with your employer.  
• Explain Your Situation: Debt review shows that you’re taking steps to manage your finances responsibly, which could be viewed positively by the employer.
• Highlight Your Strengths: Focus on your skills, experience, and qualifications. Debt review should not define your ability to perform the job successfully.

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Final Thoughts on Debt Review and Your Job Application

While debt review may raise concerns, it doesn’t necessarily hinder your career prospects. By understanding your rights and effectively communicating your situation, you can navigate the job market successfully.

Once your debt review process is completed and your debts are settled, your credit record will be cleared, and it will no longer impact future job opportunities. Taking this step reflects your commitment to financial stability, positioning you for success as you continue building your career.