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Does Filing For Bankruptcy Affect My Employment Now And In The Future?

August 17, 2017

Bankruptcy Attorney | Bankruptcy Lawyer | Akron | Ohio | Bates and Hausen LLC

In most cases, bankruptcy will not affect your current job. However, it may, when and if you engage non-governmental organizations in the future.

When planning to file for bankruptcy as an individual, several things will come to mind. You will certainly be concerned about what a current or potential employer will make of it. Will they find out about Chapters 7 and 13 of the bankruptcy when you file? How will that affect your relationship with them? Will you impending status prevent you from getting your dream job?

Here is a bit of good news that any bankruptcy attorney will tell you. Your employer (current or potential) may find out about your bankruptcy, especially in the case of Chapter 13 bankruptcies, but it will not affect your current employment. However, it could be a different matter when you are applying for a non-governmental job.

See this post to learn more about Post-Bankruptcy Discrimination: Is it Legal?)

Will You Lose Your Current Job?

The straightforward answer is no. Neither private nor government employers may fire you for your bankruptcy status. They are also not to discriminate you in any way such as demoting you, reducing your salary, or delegating your responsibilities to another party based on your new status.

Your employer may use other reasons to fire you after you file for bankruptcy. Anything that would lead to you losing your job such as indolence, insubordination, or any form of disrespect that goes against the company’s ethics will see you being shown the door. You do not want to give your employer the ammunition to get rid of you especially when you feel they want to fire you due to the bankruptcy. If you haven’t done anything to warrant firing, but you still lose your job shortly after you file, you may have a case against your employer on the grounds of unfair discrimination. A bankruptcy lawyer will help you navigate these waters.

How Will Your Employer Find Out About Bankruptcy Filings?

Your bankruptcy filing in Ohio or any other state will be safe from the world, especially since only a few of them read Chapter 7 of the Act. The only way this news will come out is when a creditor sues you, obtains the judgment from your filing, and start garnishing your wages. If this information is made available to your employer through the payroll department, your financial problems will be brought to the surface. This may not entirely be a bad thing.

Chapter 13 bankruptcies are quite different, seeing as the judge may order that the payments be deducted directly from your salary and sent to the bankruptcy court if you have a regular income. If the income deduction order is affected, then there is no way to hide your filing from your employer. They will sign up to become the unofficial agency to ensure that you fulfill your Chapter 13 mandate.

Security Clearances

Quite a number of jobs will require a security clearance. The Armed Forces, FBI, CIA, most other government agencies as well as some private companies that work with the government will demand that you have security clearance. What is the likelihood of losing your security clearance when you file for bankruptcy? Well, none. Actually, it might be a good thing for you seeing as some agencies such as the CIA view someone with lots of debt as a target for blackmail. You will lower the risk when you file for bankruptcy, seeing as the law will protect you. So, in this case, your handicap works in your favor.

Effects of Bankruptcy on Job Applicants

The law does not allow a potential federal, local government, or state employer to consider your bankruptcy status when deciding on whether or not to give you a job. The rule does not apply to the private sector, or rather there is no law restricting them from doing that. If the job you are applying requires you to deal with money such as accounting or operating the payroll, your bankruptcy status, current or past may influence their decision.

Before hiring you, most private employers will conduct a thorough check on your history. A bankruptcy report will certainly stand out, as will your credit history. You don’t want to come off as a liar or one who withholds crucial information, and so would serve you best to let the information out if the chance presents itself. Bankruptcy is not such a bad thing, but you don’t want your potential employer to find out about it the hard way when you could have volunteered the information. 

If you are in Akron, Ohio, you can hire a competent bankruptcy lawyer to break down the potential effects of bankruptcy according to the State’s law.




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