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How Does Bankruptcy Affect My Job?

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By Hannah Rush
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There are many people who face financial issues and worry about how bankruptcy will affect their job. In most cases, filing for bankruptcy does not have a negative impact on a person’s ability to find a job or receive public benefits. Depending on your state’s laws, you may have to report filing bankruptcy to a professional licensing board, and some jobs in the financial industry may require you to file for bankruptcy.

What Can My Job Seek Do?

Federal law protects individuals who have filed for bankruptcy from discrimination by employers, both government and private. This includes protection against employment denials, terminations, and retaliation. However, it does not prohibit employers from denying employment to job applicants on the basis of bankruptcy.

What Can My Employer Do?

An employer cannot fire or retaliate against you for your bankruptcy unless there is another valid reason. Moreover, an employer can’t discriminate against you in any other terms or conditions of your employment, such as reducing your salary or demoting you.

What Can My Future Employer Do?

Many prospective employers will do a credit check on you when they hire you, and the bankruptcy filing will be on your credit reports. The information is often used to help determine if you are an appropriate candidate for the job, as employers want to know that you will be able to handle money and other assets without them being stolen or taken for a loan.

You should also mention your bankruptcy during the interview process, as an open and honest discussion about your situation will help to ease any potential concerns. It will also come off as a positive thing to the prospective employer that you have taken steps to improve your financial situation instead of allowing it to spiral out of control.

How Can I Deal With a Job that has Access to Sensitive Materials?

If you work in the law enforcement field, or any other industry that requires access to sensitive materials, your bankruptcy could make it more difficult for you to secure a new job. For example, if you are a police officer or detective, you might have access to cash and other valuables that can be seized by creditors, which is a major concern for employers.

Can I Keep My Job?

In most cases, you do not have to disclose your bankruptcy filing to a prospective employer. This is especially true if you have a contract of employment or if you work in a business that is regulated by a professional licensing board.

Your employer can, however, request a copy of your bankruptcy paperwork before making any decisions about your job, such as firing you or promoting you to a higher position. You can, of course, refuse to give the employer access to your bankruptcy files, but this will usually result in a refusal to hire you.

If you are concerned that your employer may discriminate against you for filing bankruptcy, it is best to seek legal advice. Having a qualified lawyer by your side will make the entire experience less painful and help ensure that you are treated fairly.

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