Will Filing for Bankruptcy Affect My Employment?

Filing for bankruptcy is a decision that individuals and businesses may consider when overwhelmed by insurmountable debt. While bankruptcy provides a fresh start and a chance to rebuild financially, many individuals worry about the potential impact on their employment. In this article, we will explore the effects of filing for bankruptcy on employment and shed light on how it may influence your professional life.

Understanding Bankruptcy

Bankruptcy is a legal process designed to help individuals or businesses alleviate their financial burdens and resolve outstanding debts. The two most common forms of bankruptcy for individuals are Chapter 7 and Chapter 13. Chapter 7 bankruptcy involves liquidating non-exempt assets to pay off debts. This is quite rare as most cases we are able to protect (exempt) all assets. Chapter 13 involves creating a repayment plan based on the debtor’s income.

Employment Protections

Under federal law, an employer cannot terminate or discriminate against an employee solely because they have filed for bankruptcy. The Bankruptcy Code specifically prohibits employers from firing or demoting employees based on their bankruptcy status. The U.S. Equal Employment Opportunity Commission (EEOC) enforces these protections and investigates complaints related to bankruptcy discrimination.

Public Perception

Although your employer may not legally discriminate against you due to bankruptcy, it’s worth noting that public perception can vary. Some employers may view bankruptcy as a sign of financial irresponsibility or instability, which could impact their perception of your trustworthiness or ability to manage financial matters. However, it’s important to remember that bankruptcy is a legal and regulated process designed to provide individuals with a fresh start.

Background Checks and Credit Reports

While bankruptcy itself may not directly impact your employment, it can indirectly affect your professional life through background checks and credit reports. Certain positions, such as those involving financial responsibility or handling large sums of money, may require a thorough background check that includes a review of credit history. Bankruptcy filings are a matter of public record, and potential employers may discover this information during the hiring process.

Career Fields and Licensing

Some career fields require professional licensing or certifications, which may have specific guidelines regarding bankruptcy. For instance, individuals working in finance, law, or other regulated industries may face scrutiny when filing for bankruptcy due to the nature of their work. It’s important to research the requirements and regulations of your specific profession to understand how bankruptcy might impact your ability to maintain or obtain a license.

Rebuilding and Moving Forward

While filing for bankruptcy may introduce challenges in certain employment scenarios, it does not mean the end of your career prospects. Many individuals have successfully rebuilt their financial lives and gone on to achieve professional success after bankruptcy. Utilize the fresh start provided by bankruptcy to improve your financial habits, rebuild your credit, and showcase your dedication and resilience to potential employers.

Filing for bankruptcy does not automatically affect your employment. The law protects employees from discrimination based on their bankruptcy status. However, public perception, background checks, and certain career fields may present challenges. By focusing on rebuilding and showcasing your strengths, you can move forward and pursue career opportunities even after filing for bankruptcy.

In summary, while bankruptcy may introduce certain hurdles in your professional life, it should not deter you from seeking employment or career growth. Understand your rights, address concerns with potential employers honestly, and utilize the opportunity to rebuild your financial life and demonstrate your commitment to a fresh start. Remember, bankruptcy is a legal process designed to provide individuals with a second chance, and it should not define your professional future.

We Are Here To Help

Are you feeling overwhelmed by mounting debts and financial hardships? It’s time to take control of your situation and regain your peace of mind. At Pack Law, we understand the complexities of bankruptcy law in Texas, and are dedicated to helping people like you navigate through these challenging times. We are ready to provide you with the support and guidance you need to make informed decisions about your financial future. Don’t let the weight of debt hold you back any longer. 

Call Pack Law today at (713) 980-9014 to schedule a consultation and take the first step towards a fresh start. Remember, there’s hope, and we’re here to help you find it.