Now that you have decided to file for bankruptcy as a method to help you and your family out of a financial crisis, you may have questions regarding your employment status both current and future. Will you lose your job? Will your boss and other people find out about your financial situation? Could the filing of your petition impact future employment?
Job Security –
Rest assured that your job is safe as long as you are fulfilling your contractual obligations. No employer, either government or private, may fire you because you filed for bankruptcy. Nor may an employer discriminate against you in other terms and conditions of employment. For example, an employer may not reduce your salary, demote you, or take away responsibilities due to your bankruptcy.
Is your private business out there for all to hear?
Most employers in a Chapter 7 bankruptcy case will not find out about the petition. However, if a creditor is suing you and garnishing your wages then the “cat is out of the bag,” so to say. If you file for Chapter 13 bankruptcy, your employer is likely to learn of your bankruptcy case. If you have a regular job with regular income, the bankruptcy judge may order your Chapter 13 payments to be automatically deducted from your wages and sent to the bankruptcy court. In this case payroill will most definitely be aware of the bankruptcy.
No federal, state, or local government agency may take your bankruptcy into consideration when deciding whether to hire you. These rules however do not apply to private companies. The type of job you are applying for may determine how your bankruptcy may play into employment. For example, if you are applying for a job where you need to deal with balancing a budget or money such as accounting, bookkeeping, or payroll, it may impact your chances. Employers may also find out about a bankruptcy when they do a regular credit check. If you feel that your bankruptcy may impact your hiring, you may want to be upfront and honest about your financial struggles.
Keep in mind that millions of people file for bankruptcy every year. You are not alone in this. In fact, look around your office, you will see others who can commiserate with you. Fixing the problem in a legal and fair way is a responsible step in the right direction.