Bankruptcy is often viewed as a fresh start and, in many ways, it is. But that doesn’t mean that what happened in the past is completely erased. Luckily, employers are not allowed to discriminate against you because you have filed for bankruptcy. However, depending on the job you apply for, it can certainly influence their hiring practices.
Bankruptcy and the Private Industry Job Search
If you’ve filed for bankruptcy, it will show up on your credit report. Increasingly, potential employers are requesting credit report checks in addition to traditional background checks on job candidates. Doing so helps companies identify risky potential employees. For example, if a potential employee is deeply in debt and applying for a position in which they will manage money for a financial firm, the financial firm will certainly factor that debt into their hiring decision. Furthermore, candidates who have substantial debts may be more likely to steal from the firm.
Bankruptcy and the Government Agency Job Search
Just like in private industry, a potential government agency employer may do a background check on you that includes pulling your credit information. And, just like in private industry, they cannot discriminate against you as a result. However, a bankruptcy on your report can work in your favor when applying for a government job, especially if the job requires a level of security clearance. Bankruptcy can wipe debt away, and certain jobs favor those who have no debt, since employees with a lot of debt may be more susceptible to bribes.
Get Out Ahead
If you’ve filed for bankruptcy and are out on the job hunt, the most crucial advice a bankruptcy lawyer Phoenix, AZ recommends is to be honest with potential employers. Before your interview, prepare a short and concise explanation about why you’ve filed for bankruptcy, then prepare to redirect the conversation from there. Often people file for bankruptcy because a major life event has disrupted their finances, and that is very relatable. Provide the reasoning, then ensure the potential employer that it does not reflect your work ethic or ability to perform work related responsibilities.
DO NOT LIE about your bankruptcy, after all, it is public record. If an interviewer finds out you’ve lied, you can be certain you will not be getting that job.
You Can’t Be Fired
If you are already employed and file for bankruptcy, know that you are under no obligation to disclose the bankruptcy to your employer. They may find out anyway, especially if your wages have been garnished or are being redirected as a result of a Chapter 13. But your employer is prohibited from firing you for filing bankruptcy.
If you have any questions about bankruptcy and its effect on your employment, give Kamper Estrada, LLP a call today. Our experienced bankruptcy attorney offers a free one-hour consultation to help you decide if bankruptcy is the right option for you.
Thanks to friends and contributors from Kamper Estrada LLP for their insight into bankruptcy.