Can Filing Bankruptcy Affect Your Job?
Declaring bankruptcy is often a difficult decision that can bring significant financial and legal consequences. Depending on the industry you work in, filing bankruptcy can also affect your job, potential earnings and career goals.
Limitations on Career Choices
When you declare bankruptcy, certain occupations may become off-limits. These regulations vary by state, but generally, an individual with bankruptcy can’t hold a professional license in the areas of law, medicine, veterinary science, cosmetology, nursing, engineering, architecture, accounting and public accounting.
When applying for a job, most employers, especially in the financial industry, will check credit reports. Depending on the type of bankruptcy and the severity of the financial situation, the bankruptcy may show up on the report.
An employer may see the bankruptcy as a sign of financial responsibility and decide not to hire the candidate. On the other hand, the employer may see it as evidence of a person’s willingness to resolve their financial difficulties and hire them.
Impact on Wage and Benefits
Filing bankruptcy can worsen a person’s situation since employers may now pay them less than other candidates. Employers may also decide not to provide any kind of additional benefits, such as insurance or bonuses, due to the bankruptcy.
Labour Law Issues
In some cases, filing bankruptcy can also expose the person to labour law violations due to the suspension of payments and delays in wages, bonuses and other benefits. The employer may also decide to retaliate by firing the person due to their bankruptcy.
Tips for Maintaining Your Job
- Be Honest: When it comes to filing bankruptcy, let your employer know. They may understand your situation and may even provide you with the support necessary to continue your current job or a different position.
- Talk to Your Employer: Speak to your employer and explain your situation. Show them your plan for sorting out the financial difficulty and rebuilding your credit.
- Stay Motivated: Dedicate yourself to your job and don’t let filing bankruptcy affect your commitment and productivity. Your employer will be able to recognize your good work and may even increase your compensation in time.
Declaring bankruptcy can have a significant impact on your job and earnings, though it is not necessarily a career-ending experience. With the right preparation, transparency and dedication to your job, you can prove your commitment while navigating your way through the bankruptcy process.