Do Bankruptcy Filings Affect Employment Opportunities?

Bankruptcy filings do affect current jobs and future employment opportunities quite adversely. After all, the records remain on your credit report for the next ten years. Most employers these days prefer to review credit reports of applicants before hiring them on specific positions. Therefore, if you are considering filing your petition for bankruptcy and are worried about its consequences related to employment and job, it is completely natural. Having said that, there are many specific provisions in the bankruptcy code to protect bankrupt individuals in matters related to employment in the private and public sector.

Public Sector Jobs

People who have been declared as bankrupt by court and now seeking jobs in the public sector though have the right not to get discriminated just on the basis of bankruptcy record, the laws allow employers to do a thorough investigation. As part of their investigation on bankruptcy filings, they are very much likely to ask you certain questions that you may find quite embarrassing to answer. The situation can be very difficult for you if you have applied for a position where security clearance is a condition. It is important for you to understand that you cannot be denied a job just on the basis of bankruptcy discharge. The final decision of the employer must be based on the result of the investigation. Some possible questions that you may be asked to answer include questions about the reason that led to bankruptcy, whether you were financially irresponsible, whether there were mitigating circumstances, and an array of other such things.

Private Sector Jobs

Any discrimination against job seekers on the basis of bankruptcy filings is strictly prohibited as per the Section 525 of the U.S. Bankruptcy Code. Just because you have failed to repay some of your debts or because the circumstances forced you to go for insolvency or bankruptcy, it must not have any impact on the employer’s decision to hire you, especially if you are otherwise qualified for the position you have applied for. That being said, if you have applied for a position that has some financial importance, businesses do have the right to do a thorough investigation on why you became bankrupt. If they find you a risky candidate for such position, they have the right to deny you a job. Such job positions may include financial planning, accounting, retail merchandising, outside selling, banking, payroll administration, and others. In order to maximize your chances of getting such jobs is to inform the hiring manager in advance about your bankruptcy with explanation on how you have learnt from your mistakes.

Overall, despite the laws against discrimination, bankruptcy filings can still have serious adverse effects on employment opportunities both in private and public sector.

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Posted in Bankruptcy, Life After Bankruptcy | 1 Comment »

One Response to “Do Bankruptcy Filings Affect Employment Opportunities?”

  1. John says:

    Very Informative and Brilliant tips. Bankruptcy leaves an impact on your life mentally as well as financially. It becomes very difficult to lead a normal life after the disaster of Bankruptcy. It changes every thing in one’s life. Any individual going through this tragic phase of life suffers very badly if he/ she is in search of a job. The search will be very difficult with the records of bankruptcy on your credit report because records of Bankruptcy will be present on your report for the next 24 months. Though there are laws to prevent bankrupts from their discrimination but it hardly works. Every employer wants to know about your payment history, reasons of insolvency. The questionnaire becomes very long and so the frustration of yours. You can offer your employer to face investigation they want to do in your case and tell them all the facts associated with bankruptcy. If you are well qualified for the job it’s up to you to convince your employer. There are laws to help the bankrupt people but still it is difficult to get the job after bankruptcy.

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