implications of debt on institute membership

Being in debt can have a knock-on effect on many of areas of your life, including your ICAEW membership. Here, Nigel Howell, Head of Investigations at the ICAEW explains the impact escalating debt problems can have on ICAEW memberships.

In this Q&A article, Nigel Howell, Head of Investigations at the Institute of Chartered Accountants in England and Wales (ICAEW), discusses the impact escalating debt problems can have on your ICAEW membership. 

which ICAEW by-laws apply to members in relation to personal debt issues? 

There are two institute by-laws that apply to personal debt. They are Principal By-law 7 and Disciplinary By-law 4. Certain types of personal debt automatically trigger disciplinary issues, which we have no control over. 

what is the implication of bankruptcy on members? 

The Principal By-law I’ve just mentioned specifically relates to bankruptcy. It states that if you are made bankrupt, you automatically lose your institute membership. That means there’s no investigation and there are no disciplinary hearings. It’s automatic and non-negotiable. 

what about IVAs? 

IVAs are a discipline liability, but unlike bankruptcy, members are unlikely to lose their membership. Once you enter into a formal IVA arrangement, your debt is classed as being a separate liability, which you should tell us about. 

We will then contact the arrangement supervisor and monitor it. Generally speaking, as long as you successfully come out the other end of the arrangement, you can continue as a ICAEW member. The matter will go to our investigations committee because the by-laws dictate we are liable to take disciplinary action. However, we do try to be pragmatic and, unless there are any aggravating features, you should only have to pay minimal costs. You can then continue as a member. 

what if a member has a County Court Judgement (CCJ) against them? 

CCJs are also specifically mentioned in the Disciplinary By-law 4, and they also automatically mean we are liable to take disciplinary action against a member. Again, we try to take a pragmatic approach, we understand times are hard and it’s easy for people to get into difficulties. 

We are not here to make people’s problems worse however, we do have a job to do in line with the by-laws. In these circumstances, we open a file and look into numerous areas, including why you haven’t satisfied your CCJ, if you are going to satisfy it or if you are you appealing against it. 

If you aren’t appealing against it or are paying the debt, you will receive a disciplinary sanction. Because the sanction applies to a financial issue, the recommended actions are likely to be relatively low level, and if there aren’t any aggravating features, you won’t be at risk of losing your membership. 

what is an aggravating feature? 

If you’ve been dishonest at some point and you’ve misled somebody, the process isn’t always straightforward. This is what we refer to as being an ‘aggravating feature’ that may escalate your case, and potentially lead to you losing your membership. 

does the ICAEW need to be notified about informal debt strategies? 

Informal debt strategies are a slightly more grey area because when our disciplinary by-laws were written, they weren’t commonplace. This means that while we can be more clear about how we would deal with formal arrangements, such as bankruptcy, IVAs and CCJs, informal strategies aren’t covered by the by-laws. Therefore, if you do have an informal arrangement in place and are settling your debts, you don’t need to tell us and no disciplinary action will be taken. 

can a discharged bankrupt reapply for ICAEW membership? 

If you’ve been discharged, there’s no reason why you can’t apply to us to have your membership reinstated, providing there are no aggravating features in relation to your bankruptcy.  

at what point should members tell the institute about their debt issues? 

If you are experiencing personal debt, we don’t need to be informed about it unless formal measures are taken, e.g. a CCJ or IVA. 

if you could give one piece of advice to ICAEW members about debt, what would it be? 

You don’t have to notify us if your debt issues are at an informal stage. However, if your situation does become formal, it’s best you tell us because you will get credit for doing so.  

In the meantime, it’s important to remember you aren’t alone, caba are on hand to provide you with confidential support and advice. There’s also our Ethics Advisory Service, who can also discuss your financial issues with you on a confidential basis too.  

how caba can help you 

If you live in the UK and are struggling with bills or loan repayments or are concerned about your personal debt, we can help you get back in control. Our specialist debt advisors are here to provide you with impartial and confidential advice. They will work with you to create a plan that takes the pressure off. 

All of our services are free, impartial and strictly confidential. We are independent of the ICAEW and will not report or disclose any information you share with us. Our specialist debt advisors can help you to minimise the impact of your debts through advice, information, budgeting and prioritising. We can negotiate with creditors on your behalf too.  

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your questions answered 

Who is eligible for support?

We support past and present members of the Institute of Chartered Accountants of England and Wales (ICAEW)1, ACA students2, ICAEW staff members3, and the family and carers of members and students4

  1. No matter where your career takes you, past and present members of the Institute of Chartered Accountants of England Wales (ICAEW) are eligible for caba’s services for life, even if you change your career and leave accountancy 
  2. ACA students (ICAEW Provisional Members) who are either an active student or have been an active student within the last three years are eligible for caba's services 
  3. Past and present staff members of the ICAEW or caba are eligible for caba's services for life, even if you leave either organisation. Please note, for former employees, our financial support is only available to those who have had five years continuous employment with either organisation 
  4. Family members and carers of either an eligible past or present ICAEW member, ACA student or past or present employee of the ICAEW or caba are eligible for caba's support. We define a family member as a: 
    1. spouse, civil partner or cohabiting partner 
    2. widow, widower or surviving civil partner who has not remarried or cohabiting with a partner 
    3. divorced spouse or civil partner who has not remarried or cohabiting with a partner 
    4. child aged up to 25. Please note, children aged between 16 and 25 are not eligible for individual financial support 
    5. any other person who is or was dependent on the eligible individual supporting them financially or are reliant on the eligible individual’s care 
    6. any other person on whom the eligible individual is reliant, either financially or for care 

You can find out more about our available support both in the UK and around the world on our support we offer  page. 

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If you need financial support, we carry out a means test where we consider income, expenditure, capital and assets.  

*Please note none of our other services are means tested. 

I’m an accountant, but not a member of ICAEW, can you still help?

Unfortunately not. We only support past and present ICAEW members, their carers and their families. If we are unable to support you, where possible we will point you to help elsewhere.

caba has supported me in the past; can I receive support from caba again?

We understand that circumstances change. If we’ve helped you in the past there’s no reason why we can’t help you again. You can contact us at any time. Please call us if you need our help.

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