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Bankruptcy FAQ

Will bankruptcy affect my employment?

On Behalf of | Sep 28, 2022 | Bankruptcy

When crushing debt overwhelms you, bankruptcy may be appropriate for getting your finances in order. However, you may wonder if this option will complicate your life in new ways.

A common concern is that bankruptcy will prevent you from finding employment or cause you to lose your job.

Will I struggle to find a job after bankruptcy?

Federal law prohibits a government or private sector employer from withholding a job offer due to an applicant’s bankruptcy. Still, finding a private sector job may be challenging. Although it is illegal for private sector employers to discriminate among job candidates, there are instances when they may legitimately disqualify you for a job due to bankruptcy. For example, if you are applying for a finance or accounting position, bankruptcy could raise doubts about your ability to handle these roles successfully. However, potential employers may be willing to overlook the poor credit history appearing on your background report if you apply for a dental technician job.

How will bankruptcy affect my current employment?

Your employer can find out about your bankruptcy filing in various ways. For example, if you file for Chapter 13 repayment bankruptcy, your employer may receive wage assignment paperwork for your debt repayment. Although your employer’s involvement could potentially embarrass you, it is not grounds for losing your job.

However, bankruptcy does not automatically protect you from losing your job. For example, suppose your performance does not meet expectations, or you are routinely late for work. In that case, your employer may have legitimate reasons to fire you that are not directly due to your bankruptcy filing.

Bankruptcy can positively impact your life by giving you a fresh start, though you will need to work diligently at building a healthy financial future