Is Filling Bankruptcy
Bad For Your Career?
Is Filling Bankruptcy Bad For Your Career?
Filing bankruptcy is usually a last resort act, a formal way to become free of the burden of overwhelming debt. Because bankruptcy filings are a permanent public record, some people worry that running out of financial stamina can spell the end of their professional careers. However, in many cases you will be better off filing bankruptcy than if you did not.
Some jobs require security clearances, but bankruptcy does not necessarily mean you cannot get a job with government agencies such as the CIA and FBI, according to Attorney Stephen Elias' book "The New Bankruptcy: Will It Work for You?" In fact, people with high amounts of unpaid and late debts pose an increased security risk for such jobs; people with serious financial problems are at much greater risk of being blackmailed. Thus, literally wiping the financial slate clean could actually help you in some types of sensitive career endeavors.
When people are at the point of contemplating full debt relief under Chapter 7 or partial debt relief in Chapter 13, their employers may already be involved in the debt situation. Debt collectors commonly call places of work unless they receive a formal demand from you not to do so. If you are sued for debt and your wages are garnished, your employer knows and in effect becomes a collector for the company to which you owe money.
Federal, state, and local government agencies cannot use your bankruptcy as a reason not to hire you. However, there is no law that stops private companies from using bankruptcy as a reason not to hire you. If you currently work for a company and file bankruptcy, legally your employer cannot use that as a reason to terminate your job. However, if you have a history of other problems such as absenteeism or tardiness then your employer could technically use those issues as an excuse to end your job. Though you could try to sue your former company, it may be very hard to actually prove that you were fired due to your financial situation.
If you work with money or merchandise, your bankruptcy is much more likely to haunt you than if you work as a writer or receptionist. Honesty is always the best policy. If you filed bankruptcy due to a divorce, job loss, or medical problems a company's human resources representative might be much more forgiving than if you were simply irresponsible.