Does Filing for Bankruptcy Affect Your Job?

Nobody wants to file for bankruptcy. It is often done as a last resort because it is often seen as a negative mark on your record. People who know you filed for bankruptcy will undoubtedly gossip about you or, at the very least, think differently about you.

Even though more and more people are filing for bankruptcy as inflation increases rapidly and the cost of living becomes unaffordable, bankruptcy still has a stigma attached to it. Because of this, many working folk are concerned about what will happen if their employer finds out that they have filed for bankruptcy. Will they lose their job?

The good news is that the law prohibits discrimination against those who file for bankruptcy. Under 11 U.S. Code § 525, no private employer may terminate the employment of someone who files for bankruptcy. They also cannot discriminate against someone in regards to employment, based on a bankruptcy filing.

There is one caveat to this, though. If you have a bad credit score and are applying to a job that requires a security clearance or expects you to work with money (such as an accountant or other job in finance), it could negatively impact your chances of getting a job. And bankruptcies are often tied to low credit scores.

You should be informed when this happens, though. Under the Fair Credit Reporting Act, companies who use your credit information for credit, insurance, or employment purposes must notify the consumer when an adverse action is taken based on the credit reports. So, if an employer rejects your application because of your past bankruptcy, a 500 credit score, or multiple collection accounts, you should be made aware.

But you should be made aware even before the credit check takes place. When a potential employer checks your credit, you will have to sign a form granting them permission first, so it should not be a secret. If you are told that the company will do a background check, ask what that check includes.

If you know your credit is poor or you have filed for bankruptcy, be prepared to explain the situation. Convince the employer that you are not financially irresponsible and are making strides toward improving your financial situation.

Contact Our West Palm Beach Bankruptcy Attorney Today

Bankruptcy is a huge decision. It can be seen as negative, so it comes with a stigma. Because of this, your employment could be affected.

West Palm Beach bankruptcy attorney Brian K. McMahon, P.A. can make the bankruptcy filing process easy to understand and as stress-free as possible. Bankruptcy is a serious matter that can have a lasting impact on your financial situation, so do not try to do the process on your own.

Schedule a consultation to learn more. Call (561) 658-1789 or fill out the online form. We serve the West Palm Beach, Boca Raton, Port St. Lucie, and South Florida areas.