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Employer Attitudes To Trust Deeds

The credit reference agency Call Credit has this week reported that employers are making greater use of credit checks. They are used in particular for the recruitment of new staff and promotion processes for existing employees. Given this growing trend, will persons that have entered Scottish trust deeds (or other debt solutions) (or other debt solutions) find themselves increasingly disadvantaged in the workplace?

A good starting point when reviewing this subject is to understand why an employer might wish to check your credit record. In many instances employers are using these checks simply to confirm the identity of a job applicant. Like financial institutions verifying the identity of their clients, employers have responsibilities to be sure of the identity of their staff. Where this is the purpose of an employer credit check those in protected trust deeds probably have little to fear.

Credit checks on staff may also be undertaken to identify risks to the employer. Certain government agencies, financial services businesses, and disciplined roles (for example the police) may view over-indebted employees as potentially creating risks due to their financial vulnerability. There are also a small number of roles that persons using protected trust deeds will not be able to fulfil, but these are the exception.

What does this mean for someone using a trust deed, or someone who is considering starting one in the near future?

It should be remembered that, in terms of any potential workplace issues, trust deeds are generally a symptom of a problem rather than being at the core of the problem itself. Used as a last resort by persons that cannot otherwise repay their debts, Scottish trust deeds can bring an otherwise uncontrollable situation under control.

An example of this can be found in terms of police officers. Where there is good advance communication between the police officer and his or her employer, it is normally perfectly acceptable for Scottish trust deeds to be undertaken. There is an understanding that by bringing the situation into the open, and by dealing with the root of the problem, the police officer and their employer will be become less vulnerable to risks and more capable of focussing on their roles.

The financial services industry is another interesting example. Many employers insert clauses in contracts that require employees not to enter insolvency measures such as trust deeds and to declare them to the employer if they do. Often however an employee that approaches their employer about the prospect of entering Scottish trust deeds is met only with support and recognition of their honesty and openness.

Where a financial situation has deteriorated to a point at which trust deeds have become necessary, the potential presence of employer credit checks will generally not be the most important issue. By failing to deal with the debts there remains a serious risk of legal action and/or spiralling debt totals in the future. These outcomes are not in the interests of an employee or their employer.

There is no escaping the fact that many people will not want their employer to know that they have entered Scottish trust deeds. Employers that have made a decision to use credit checks will find out about trust deeds to the discomfort of the employee. While this will not be an enticing prospect, the alternative option of allowing debts to spiral further out of control with all of the legal threats that this could bring is surely a worse option for most people?

To find out more about your employment and protected trust deeds (or other debt solutions) you may wish to visit our trust deeds forum and question the experts and fellow members on the subject.

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