can filing bankruptcy affect your job

can filing bankruptcy affect your job

Can Filing Bankruptcy Affect Your Job?


Filing for bankruptcy can be a difficult decision. It can bring financial relief in certain circumstances, however, it can also cause a great deal of stress. One of the main concerns after filing for bankruptcy is how it could affect your job.

How Filing Bankruptcy Could Affect Your Job

Bankruptcy can have a wide range of implications, both positively and negatively depending on the circumstances. Some of the potential effects of filing bankruptcy on employment include:

  • Employers may not hire you: While some employers will look past bankruptcy in an applicant’s background, some may not consider candidates that have filed for bankruptcies in the past. It is more difficult to secure a job with a bankruptcy on your record.
  • Your current employer may terminate you: While technically any termination must not be related to a bankruptcy filing, if your employer becomes aware of your bankruptcy they could take steps to terminate your employment. This is especially likely if your financial difficulties could have a negative effect on the company.
  • Your current employer may suspend you: Similar to termination, employers may also suspend an employee for financial reasons, such as filing for bankruptcy. This is more likely if you hold a position of trust or could become an economic liability for the company.
  • Your position could be changed: In some cases, an employer may decide to re-assign an employee to a lower-level position. For example, if you are an accountant, your employer could decide to move you to a lower-level position until the bankruptcy is resolved.

How to Prepare if Filing Bankruptcy

It is important to prepare yourself if you are considering bankruptcy. It is best to seek legal counsel to help you through the process. You should also plan on how you will explain the bankruptcy to any potential employers or existing employers. Finally, you should prepare financial documents that help explain the circumstances of your bankruptcy and how you plan to move forward with your finances.


Filing for bankruptcy can have serious implications for your job and future employment opportunities. However, if you prepare and understand the potential impact it could have, you can make the best possible decisions for your future.


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