As Philadelphia bankruptcy lawyers one of the biggest concerns we hear is whether taking the step of declaring bankruptcy will impact our client’s abilities to pursue their careers, or even to stay employed.
Since your ability to make money is generally the greatest asset you have, this is a great question to ask. Fortunately bankruptcy rarely keeps people from moving forward in most careers. As ever there are some exceptions.
It’s illegal to use bankruptcy to discriminate against an employee.
No employer can refuse to hire you because you’ve filed for bankruptcy, and no employer may fire you because you’ve filed for bankruptcy. You are protected by the United States Bankruptcy Code.
If you feel you’ve been discriminated against you may have grounds for pursuing a civil lawsuit against the employer in question.
You are not required to disclose your bankruptcy to your current employer.
There’s a good chance your current employer will never find out about your bankruptcy, unless you owe your employer money and include that debt in the bankruptcy. You can also disclose your bankruptcy if you choose, but nothing compels you to.
Nobody will send your boss a letter or shoot your boss a phone call. Your financial life remains your business.
Some potential employers may pull credit.
If you’re in the middle of a job hunt you should know some employers can and do pull credit. They are allowed to pass you up for employment based on your credit score, or due to past delinquencies on your credit report.
Usually this happens in positions of high trust, where you’ll be dealing with financial matters, or high-value assets. This can also happen when you’re pursuing a position that requires some sort of security clearance, or a position in law enforcement.
Having a bankruptcy does not bar you from these professions, but it can make it a little harder to get employed. However, if you’re already drowning in delinquencies bankruptcies won’t hurt or help any
Your credit score may improve when you file for bankruptcy.
If your employer is only checking your score, rather than scouring the entire credit report, you may be in luck. Your credit score tends to get higher after your discharge. Months or even years of late payments, missed payments, and delinquent accounts get removed virtually overnight.
What remains is a clean slate, and while your credit may not be great, it might nevertheless be as many as 20 points higher when the process is complete.
There are ways you can help your job search even if you think your employer will pull credit.
Business Insider suggests being up front with your employer about your financial past, remaining aware of your rights, and coming armed with lots of letters of recommendation. Remember employers aren’t monoliths: they’re people just like you are, and some of them might have had some financial trouble in their past, too. And if your bankruptcy is for medical or other unavoidable reasons, you might not have any trouble at all.
Don’t let fear of future career issues stop you from filing for bankruptcy if it’s the right financial move for you. There’s every chance you will bounce back and get on with your life. Your career might even flourish once you’re no longer distracted by financial trouble!