How Will Filing for Bankruptcy Affect My Job?

 Posted on May 13, 2022 in Bankruptcy

If you are considering bankruptcy, you are likely to be dealing with multiple types of difficult financial issues. During this time, the last thing you want to worry about is the possibility that you could lose your job or struggle to earn enough income. Fortunately, the bankruptcy laws provide some protection, and by understanding what employers can and cannot do in response to your bankruptcy, you can avoid uncertainty and continue working to achieve financial success in the future.

Can an Employer Fire Me for Filing for Bankruptcy?

Fortunately, Section 525 of the U.S. Bankruptcy Code states that an employer cannot terminate a person’s employment because they have filed a petition for bankruptcy or sought relief from their debts. Employers are also prohibited from taking any other discriminatory actions against an employee, such as demoting them or reducing their wages.

In fact, you generally will not be required to tell your employer that you are pursuing bankruptcy. However, your employer may find out about your bankruptcy on their own in some cases. For example, if your wages are currently being garnished because of a legal judgment against you by a creditor, this garnishment will cease when you file for bankruptcy. Your employer will also be notified if you owe them money for any reason, and you may need to address these debts during the bankruptcy process.

How Will Bankruptcy Affect My Future Job Prospects?

If you will be looking for a new job in the years after filing for bankruptcy, you will not be required to disclose your bankruptcy filing to a prospective employer. However, some employers perform credit checks of prospective employees, and this may lead them to learn about your bankruptcy. Under the Fair Credit Reporting Act, an employer is required to receive written permission from you before performing a credit check, and they must notify you about whether any information found plays a role in their hiring decisions. 

If you are applying for a job with a government agency at the federal, state, or local level, a previous bankruptcy filing cannot be considered when deciding whether to hire you. However, private employers may consider a bankruptcy case when making hiring decisions. This will typically only be a factor for those who will be working in financial positions, such as jobs involving accounting or payroll. If you are concerned about how an employer may view your bankruptcy, it is often best to be honest about the circumstances that led you to pursue debt relief. Many employers will be understanding about these issues, especially if you can provide them with references from others and assurances that your personal financial concerns will not play a role in your ability to handle work-related responsibilities.

Contact Our San Antonio Debt Relief Attorney

If you are dealing with debts or other financial issues, you will want to make sure you will be able to maintain steady employment. Fortunately, filing for bankruptcy can help you address the financial concerns that are causing you stress and potentially affecting your job performance. At the Law Offices of Chance M. McGhee, we can advise you on how bankruptcy will affect your job, whether you should inform your employer about your bankruptcy filing, and how you can protect your future job prospects. To schedule a free consultation and learn more about how we can help you address debts and related financial concerns, contact our Kerrville bankruptcy lawyer at 210-342-3400.

Sources:

https://www.thebalance.com/will-filing-bankruptcy-affect-your-job-4140677

https://www.law.cornell.edu/uscode/text/11/525