How Will Bankruptcy Affect Me in the Workplace?
Feb. 17, 2023
Bankruptcy is among the promising solutions for individuals facing financial hardship to achieve debt relief. However, since the information remains on your credit report for a long time, there are long-term consequences of filing for bankruptcy on your employment. Especially when the job requires a good credit score or credit check, filing for bankruptcy might affect your ability to get a new job or promotion at your current workplace.
At Pytte Law, we provide comprehensive guidance and advocacy to clients in the legal matters of bankruptcy and debt relief. As a practiced Georgia bankruptcy attorney, I can work to understand your situation and tell you about how bankruptcy affects your current employment and prospects of getting a new job. My firm is proud to serve clients across Savannah, Hinesville, Statesboro, Richmond Hill, Bryan County, Chatham County, and Tattnall County, Georgia.
Will Filing for Bankruptcy Affect My Current Job?
Essentially, filing for bankruptcy alone isn’t enough to make you lose your current job. According to Title 11 U.S. Bankruptcy Code Section 525, no government or private employer can terminate – or change the terms and conditions – of an individual’s employment solely based on bankruptcy.
This means that your employer cannot fire you, remove your responsibility, decrease your salary, or demote you just for filing for bankruptcy. Nonetheless, your employment status may be under threat due to dishonesty, incompetence, unaccountability, or lateness.
Jobs That May Be Affected by Bankruptcy
However, most jobs that require their current or potential employees to have a good credit score or credit check may be affected by bankruptcy. These include:
Financial-Related Jobs: Employers in accounting, banking, and payroll expects their employees to have a good credit score because they often have access to money. The employer can believe that you might be compromised and unable to handle money due to your financial instability.
Law Enforcement Positions: Police and law enforcement officers usually deal with sensitive material, including seized cash, drugs, guns, and ammunition. It is believed that any of these items can be taken or sold secretly by someone with a financial problem. Hence, filing for bankruptcy can affect your prospects of keeping or getting a job in the law enforcement sector.
Security Clearance Positions: In addition, positions that need a security clearance – such as military positions, CIA and FBI jobs, and federal or state government contractors – always include a credit check. You might be flagged as a risk for selling secrets to achieve financial stability if you have bankruptcy on your credit report.
Will Bankruptcy Affect Getting Hired?
According to a recent survey, about 25% of employers carry out an employment credit check on applicants before hiring them for certain positions. Generally, your prospect of getting a new job after filing for bankruptcy will depend on the type of position you’re applying for.
As mentioned earlier, if the position requires dealing with money, sensitive materials, or other crucial information, getting such jobs might be difficult. The employer must request your consent before checking your credit report.
If they fail to hire you or terminate your employment due to negative information on your credit report, the employer must inform you and send you a copy of the credit report which was used to take such action.
Hence, if you don’t want potential employers to know about your bankruptcy, it is advisable that you avoid such positions that require an employment credit check. Nonetheless, you can start rebuilding your credit immediately after filing your bankruptcy petition or getting your discharge.
Get the Support of a Bankruptcy Attorney
Filing for bankruptcy is a difficult decision and can affect various aspects of your life, including your employment. If you’re concerned about how bankruptcy will affect your current job or future employment, consulting with a seasoned bankruptcy attorney is crucial for detailed guidance.
At Pytte Law, I’m ready to advise and direct clients through the challenges of filing for bankruptcy. As your legal team, I can determine the right chapter for your specific financial situation and help file your petition. Also, I will outline an effective strategy to rebuild your credit score, improve your finances, and help retain your job or prepare you for your next position.
Contact me today to arrange a consultation with an experienced bankruptcy attorney. I have the reliable legal guidance and reliable advocacy you need to make intelligent decisions in your case and about life post-bankruptcy. My firm is proud to serve clients across Savannah, Hinesville, Statesboro, Richmond Hill, Bryan County, Chatham County, and Tattnall County, Georgia.