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Will Bankruptcy Affect My Employment?

| Oct 15, 2013 | Bankruptcy

If you are considering filing for bankruptcy, you might be concerned about how your filing will affect your future employment. Can your employer fire you because of the bankruptcy? Will your employer even find out? Will you ever get a job again? Rest assured that, while your bankruptcy may have some impact on your current and future employment, that impact is likely to be minimal.

Can my employer fire me because I filed for bankruptcy?

In most cases, if you file for bankruptcy you will not lose your job. It is against the law for your employer (private or public) to fire, demote or punish you simply because you filed for bankruptcy.

Will my employer find out about my bankruptcy?

Your employer probably will not find out about your bankruptcy if you file under Chapter 7, even though bankruptcy is a public proceeding. However, your employer will receive notice of a wage garnishment if a creditor garnishes your wages prior to the bankruptcy or if the bankruptcy court stops the wage garnishment during the proceeding. If you filed a Chapter 13 bankruptcy, your employer will probably learn of your filing because the court may order the reorganization payments to be automatically deducted from your wages.

Will my future employers find out about my bankruptcy?

Government agencies at the federal, state and local levels cannot take your prior bankruptcy filing into account when you apply for a job, so your bankruptcy will not affect you in obtaining a new job with those agencies. Private employers, however, may take your credit history into account, and you could be denied a job due to your previous financial difficulties. In this situation, try to be upfront with your potential employer and explain the circumstances that led to your bankruptcy. Bankruptcy may also affect your ability to obtain certain professional licenses.

As you can see, your bankruptcy filing may have some impact on your current and future employment. An experienced Pennsylvania bankruptcy attorney can help you minimize the negative impacts and help guide you through the bankruptcy process.