Can Bankruptcy Impact My Career?

Deciding to file for bankruptcy is a significant step that demands careful consideration of various factors. If you’re encountering financial difficulties, the prospect of halting debt collection and starting anew can be incredibly appealing. However, it’s completely natural to be overwhelmed with worry about how this decision might influence your career. At Whitten & Whitten, we have assisted countless individuals in navigating this difficult decision. In this post, we will explore the primary concerns individuals often have regarding the impact of bankruptcy on their professional lives, helping you determine if this option is the right choice for you.

Will My Employer Find Out About My Bankruptcy?

One of the primary concerns for individuals considering bankruptcy is whether their employer will find out. The truth is that bankruptcy filings are public records; however, they aren’t commonly accessed by employers. Employers typically don’t search for such information unless there’s a specific reason, so your filing is unlikely to come to their attention.

That said, there are scenarios where your employer might learn about your bankruptcy. For instance, if you’re undergoing wage garnishment and file for bankruptcy, your employer may be notified to cease the garnishment. Also, in Chapter 13 bankruptcy cases, some courts may require employers to deduct payments directly from your wages to ensure compliance with the repayment plan. As a rule, though, bankruptcy trustees or courts generally do not inform employers directly.

Can I Be Fired for Bankruptcy?

Many people fear they could lose their jobs if their employer learns of their bankruptcy. The good news is that, legally, an employer cannot fire you solely because you’ve filed for bankruptcy. This protection is enshrined in U.S. bankruptcy laws to prevent discrimination against individuals who are trying to manage their financial difficulties.

However, while bankruptcy can’t be the sole reason for termination, it doesn’t protect against dismissal for other legitimate reasons. If your performance slips due to stress and worry related to your bankruptcy filing, it’s possible for an employer to let you go. As long as you can perform your job satisfactorily, the chance of losing your job due to bankruptcy is relatively low.

Will Bankruptcy Affect Future Employment?

Many individuals considering bankruptcy worry about how it will impact their ability to secure future employment. The truth is that the vast majority of employers don’t routinely run credit checks on potential employees, and bankruptcies are not included in background checks. Additionally, federal law prohibits discrimination against job candidates due to past bankruptcy filings.

That said, some industries do conduct credit checks as part of their hiring process, such as financial institutions or government agencies dealing with sensitive information. In these cases, a low credit score caused by your bankruptcy could potentially affect your chances of being hired. However, it’s essential to keep in mind that a bankruptcy filing can also demonstrate responsible financial management and a willingness to address previous debt issues head-on.

Tips to Prevent Impact on Your Professional Life

Overall, bankruptcy is unlikely to have a significant impact on your professional life. Your employer typically won’t find out about your filing, and you cannot be fired solely because of it. Furthermore, unless you are applying for positions in specific industries that require credit checks, it usually won’t affect future employment opportunities. However, if you’re still concerned, there are proactive measures you can undertake to further minimize its potential impact, including:

1. Maintain Discretion – While it’s essential to inform relevant parties, like a bankruptcy attorney, there’s no need to broadcast your financial situation to colleagues or employers. Keep it confidential to avoid unnecessary stress or judgment.
2. Focus on Performance – Ensure your work performance remains strong. Meeting or exceeding expectations at your job can reaffirm your value to your employer, overshadowing any financial issues.
3. Rebuild Your Credit – Take steps to improve your credit score post-bankruptcy. This includes responsible financial management and timely payments, which can boost your creditworthiness over time.

Don’t Let Fear Hold You Back

While bankruptcy can be a difficult and emotional decision, its impact on your professional life is often minimal. Employers typically don’t learn of your filing unless there’s a specific reason, and they cannot fire you solely because of it. Furthermore, future employment opportunities are unlikely to be affected unless in certain industries that require credit checks. And even then, taking proactive measures can lessen any potential impact. Remember, bankruptcy is a tool designed to help individuals regain financial stability and should not be viewed as a detriment to your professional life.  

So, if you’re struggling with debt, don’t let fear hold you back from seeking appropriate solutions like bankruptcy. Reach out to experienced professionals like Whitten & Whitten for assistance in navigating this complex process. Our dedicated team is here to guide you every step of the way.