Will Filing for Bankruptcy Affect Your Career?

One reason people are afraid to file for bankruptcy is the belief that it will negatively impact their careers. Most people have some sense that a bankruptcy will be reported on their credit report and that many employers pull credit reports before hiring. It is a perfectly valid concern to have, but it shouldn’t prevent you from filing for bankruptcy if filing is appropriate.

Your Current Job is Safe 

Under federal law, no employer can fire an employee because they have filed for bankruptcy.  This rule applies to both private and government employers, so all employees are protected. Furthermore, your employer cannot use a bankruptcy to change the conditions of your employment, for example by demoting you or reducing your hours or salary.

If you believe your employer has punished you because of your bankruptcy, you should seek out a lawyer’s help immediately. You might be able to sue. 

A Bankruptcy Might Impede Your Ability to Get a New Job

Things are more complicated if you are looking for a new job. As part of the job search, many employers pull their applicants’ credit histories, so they will see whether you have filed for bankruptcy. Although an employer needs your consent to pull the credit history, they can also reject you if you refuse to grant it. As a result, you should expect that potential employers will see your bankruptcy.

In some situations, an employer might reject your application out of hand because of the bankruptcy. If the job description requires that you handle money, then you might be seen as a risk. Nevertheless, you need to weigh how a bankruptcy can help you in the job process.

For example, your credit score might be junk already, especially if you have been late making payments or if accounts have gone to collections. A credit score in the 500s does not make you an attractive job candidate, either. By filing for bankruptcy, you can immediately begin rebuilding your credit and free up cash in the process.

Furthermore, filing for bankruptcy shows that you are proactive about addressing your financial difficulties. By filing, you also decrease the changes that you will ever be tempted to steal from your employer, since you will have wiped out the most pressing debts. 

Analyze Your Situation 

Whether to file for bankruptcy is an individualized choice, and no two situations are alike. Consider the following:

• When are you likely to begin looking for a new job? If you are happy with your current employer, then you don’t face negative repercussions if you file.
• Can you clear debt without filing for bankruptcy? Paying the minimum on a credit card is not a winning strategy. Instead, consider whether you can pay off your credit cards and other unsecured debts over the next 12-18 months.
• Are you prepared to talk to a future employer about why you filed for bankruptcy?
• How well positioned are you for getting the job of your dreams? Do you have the skills and necessary experience? These are more important factors than your credit report.
  

Speak to a Florida Bankruptcy Lawyer 

Filing for bankruptcy can be the first step to alleviating money problems and stress. At Nowack & Olson, our Plantation bankruptcy attorneys offer a free consultation to answer any questions you might have. Contact us today by calling 866-907-2970.

Resource:

foxbusiness.com/features/what-to-do-when-an-employer-wants-to-pull-your-credit-report