If you are currently employed and have recently filed for bankruptcy, it is important to know what impact it will have on your job. The answer to this question will vary depending on the type of job you have, your employer, and the law.
Federal Employment Law
In the United States, you cannot be fired from your job for filing for bankruptcy. This is true in private industry as well as in government organizations. In fact, federal law specifically prohibits employers from discriminating against you because of your bankruptcy, and if your employer fires or demotes you because you filed for bankruptcy, it can be considered illegal workplace discrimination.
However, it is possible for an employer to retaliate against you after learning that you have filed for bankruptcy, and this may lead to legal action. If your employer terminates you or retaliates against you for filing for bankruptcy, you can file a lawsuit to get back pay or other compensation.
Your Credit Score Will Be Affected
If you file for bankruptcy, it will affect your credit score for a period of 10 years. This will make it more difficult for you to obtain new loans, such as mortgages or car loans.
Your job will not be affected by your bankruptcy unless you are employed in the financial sector, or you work for an agency that needs to retain access to sensitive materials and information. In this case, you should inform your potential employer of your bankruptcy so they will not consider it a reason to not hire you.
You should also be aware that if you are applying for a position in a public or governmental organization, you will likely be subjected to a credit check by the employer as part of the hiring process. You should tell the prospective employer about your bankruptcy, mentioning why it occurred and providing any relevant context that will help them understand why the information will not impact your ability to perform your job duties.
Job Searching
It is not illegal to conduct a job search while you are in the bankruptcy process. It is also not a bad idea to keep your current job until the bankruptcy is completed, as it can provide you with income and stability while you look for a new one.
Getting a new job can be a great way to start fresh after you have gone through bankruptcy, and it can allow you to reactivate your network of friends and professional colleagues. You can also use this time to focus on your career goals.
When Will My Employer Know That I Have Filled for Bankruptcy?
It may be harder to find a job in the private sector after bankruptcy. Some people have found that their former bankruptcy comes back to haunt them when they are trying to find a new job in the public sector or in a private industry that requires employees to handle money and confidential information.
