Bankruptcy comes with a host of powerful benefits, but it can also have certain consequences. For example, it may prevent you from buying a home or taking out loans at low-interest rates immediately after filing. These consequences fade significantly over time, but it is important to understand what short-term and long-term effects bankruptcy could have on various aspects of your life.
Will Bankruptcy Affect My Job Search?
One question we often get from clients is whether bankruptcy will affect their future job search. Unfortunately, the answer is not a straightforward “yes” or “no.”
Generally, bankruptcy will not affect your current employment, although your employer may find out about it.
Your current employer could find out about your bankruptcy if:
- You had a wage garnishment order that was halted by bankruptcy’s automatic stay
- You filed Chapter 13 bankruptcy, and payments were taken directly out of your paycheck
- Your employer is one of your creditors
Retaliation For Filing Bankruptcy Is Unlawful
Whether your employer is a private company or the U.S. government, firing you (or otherwise changing the conditions of your employment, such as your salary) solely for filing bankruptcy is against the law. If you lose your job or receive a pay cut immediately after filing, you may have experienced unlawful discrimination.
If you try to find another job in a private industry, however, you may have more trouble after filing bankruptcy. Local, state, and federal government employers cannot consider your bankruptcy filing during the hiring process, but private employers can. They may run a credit check and discover the bankruptcy, and it might influence their hiring decision if your desired position deals with money (e.g accounting or financial advisement).
Legally, you can refuse a credit check, but a private employer could decide not to hire you simply because you declined it. As such, being honest and upfront with a potential employer is most likely your best course of action.
When Can Bankruptcy Help My Employment?
In some cases, bankruptcy can actually help you. For positions in the military, CIA, FBI, or other organizations that require security clearances, the elimination of debt through bankruptcy could work in your favor. High levels of debt carry certain risks and consequences.
Ultimately, a qualified professional will be able to provide personalized guidance regarding the potential consequences of bankruptcy. The better you understand your rights and opportunities, the better equipped you will be to make fully informed legal and financial decisions.
Our Team Can Address Your Concerns
At The Buchalter Law Group, our team of attorneys has decades of experience helping clients navigate bankruptcy and overcome financial hardship. We are fully prepared to help you understand both the benefits and potential risks of bankruptcy, and we can work together to develop a plan that works for you.