How does bankruptcy affect your job and future credit

How does bankruptcy affect your job and future credit? Filing for bankruptcy may raise concerns about its potential impact on your employment status, especially if you’re eyeing a job in the private sector. Some common questions include:

  • Will an employer find out about your Chapter 7 or 13 bankruptcy?
  • Can an employer terminate an employee who has declared bankruptcy?
  • Is it legal for a company to reject a job candidate because of bankruptcy?

In most cases, your current job will not be affected by bankruptcy, even if your employer becomes aware of it. However, it may limit your chances of securing a private sector job in the future.

Can You Lose Your Job Because of Bankruptcy

It is important to note that filing for bankruptcy does not give your employer the right to terminate your employment or make any changes to your employment terms and conditions. Specifically, your employer cannot:

  • Reduce your salary
  • Demote you
  • Take away your responsibilities

In fact, if your employer fires you soon after learning about your bankruptcy, you may have grounds for unlawful discrimination. However, it’s worth noting that a bankruptcy filing does not protect you from other forms of workplace misconduct. If you have been consistently late, dishonest, or incompetent, your bankruptcy will not prevent your termination.

Will the Bankruptcy Court Publish Your Bankruptcy Filing?

Are you concerned about the publicity of your bankruptcy filing? It’s important to note that all bankruptcy filings are considered public records. 

However, it’s not always easy to locate specific cases through the court’s Pacer system. Unless you have a history of filing for bankruptcy, it’s unlikely that your employer or boss would verify your filing status.

Can the Bankruptcy Trustee Contact Your Employer?

While it’s not a regular practice for bankruptcy trustees to reach out to an individual’s employer, it’s possible for an employer to discover a bankruptcy filing through public records or credit checks. 

Additionally, if a filer owes money to their employer or has a garnishment order in place, the employer may become aware of the bankruptcy through the court’s notification. It’s important to keep in mind that while employers may find out about a bankruptcy filing, there are laws in place that protect individuals from discrimination due to bankruptcy, so employees should not fear retaliation from their employers.

What Can Employers Learn About an Employee’s Bankruptcy?

Employers rarely learn about bankruptcy filings. However, it can still happen. Here’s how.

  • If your wages were being garnished, bankruptcy has stopped it. Inform your employer about your filing. Most employers appreciate their employees taking responsibility to resolve their financial problems.
  • In a Chapter 13 bankruptcy, the judge may require your employer to deduct payments from your wages and send them to the trustee responsible for your case. Your employer acts as a collection agent to ensure you follow your Chapter 13 plan.
  • If your employer owes you money and you file for bankruptcy, list all debts in your paperwork, including any overpayments. Your employer will be notified about your bankruptcy case.

Clearances for Security, Bankruptcy, and Employment

If you work in a government agency or as a private contractor with the government, you may require a security clearance for your job. While some people believe that filing for bankruptcy could put their security clearance at risk, it’s unlikely to happen. 

In fact, filing for bankruptcy may even prove to be beneficial. According to credit counselors for the military and the CIA, individuals with high levels of debt are more susceptible to being targeted by blackmail. By reducing your debt through bankruptcy, you can significantly lower this risk, making filing for bankruptcy a more advantageous move than a detrimental one.

How Does Bankruptcy Affect Job Applicants?

How does bankruptcy affect your job and future credit? Your bankruptcy status cannot be used against you by any federal, state, local, or regional government agency when determining your eligibility for employment. However, private employers are not subject to the same rules and may be more cautious about hiring individuals who have filed for bankruptcy. This is especially true for jobs that deal with money, such as bookkeeping, accounting, and payroll.

To determine if you have filed for bankruptcy, private employers may conduct credit checks on job candidates. Employers must obtain your consent before running a credit report on you. While employers have the right to refuse to hire you, it’s important to be honest and open about any negative findings that may arise during the credit check.

While having a bankruptcy in your past may be a concern for some employers, it’s important to keep in mind that bankruptcy can happen to anyone and is often a result of circumstances beyond a person’s control. As such, it’s important to be transparent and upfront about your financial history when applying for jobs that may be affected by a bankruptcy filing.

Do You Need More Help With Bankruptcy?

How does bankruptcy affect your job and future credit? If you’re struggling with debt and are considering bankruptcy, Bruner Wright is here to help. Our team of experienced bankruptcy attorneys in Jacksonville and Tallahassee, FL, has helped countless individuals and businesses find relief from overwhelming debt through the bankruptcy process.

Bankruptcy can be a complex and emotional process, but our attorneys are here to guide you through every step of the way. From the initial consultation to the final discharge, we’ll work closely with you to understand your unique circumstances and goals and develop a customized bankruptcy strategy that meets your needs.

With years of experience and a deep understanding of the bankruptcy code, our attorneys have the skills and expertise necessary to help you navigate even the most complex bankruptcy cases. We’ll work tirelessly to protect your rights and interests, and ensure that you receive the best possible outcome for your case.

Let Bruner Wright help you find a path to financial freedom through bankruptcy. Contact us today to schedule a consultation with one of our experienced bankruptcy attorneys in Jacksonville or Tallahassee, FL.

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