Will Bankruptcy Affect My Employment?
Are you struggling with debt but worried that filing for bankruptcy might negatively affect your employment situation? This page will explain how the law may protect you from being penalized in the workplace for a bankruptcy filing.
If you're considering filing bankruptcy as an option to help get on top of your debts, you can explore your options with a bankruptcy attorney.
Find out if bankruptcy could put an end to creditor harassment and give you the breathing room you need to rebuild your finances. Connect with a local bankruptcy lawyer for a free, no-obligation consultation today.
Can I Lose My Job if I File for Bankruptcy?
In most cases, federal law prohibits employers from penalizing employees at work for filing for bankruptcy. But, while a bankruptcy filing itself may not be reason for dismissal, your standing around the office may be at risk if one of the following is true:
- You're in a position that requires financial management. If, as part of your job description, you’re responsible for certain types of accounting or payroll management, there’s a chance that an employer could argue that a personal bankruptcy filing is reason to review your employment status. If your job has nothing to do with handling finances or accounts, though, you’re probably safe from losing your job.
- You spend work time dealing with personal debts. If, before you chose to file for bankruptcy, the stress caused by your debt load leaves you unable to focus or perform at work, your boss may discipline you for performance-related issues; however, admonishing you about your debt itself would generally be off the table.
How Might Debt Affect My Job?
Even though your job may be legally protected if you file for bankruptcy, you should be aware that serious debt can cause a number of work-related consequences. Consider, for example, the following:
- Wage garnishment: For some types of debt, creditors can legally attempt to collect what you owe them by garnishing your wages. This means that they contact your employers and have part of the money you earn paid to them before you ever see it. If you’re worried that this might happen to you, it might be a good idea to contact a bankruptcy lawyer to see if your types of debt would be eligible for garnishment in your state.
- Credit history checks: When you apply for new jobs, some employers will examine your credit history by pulling your credit report. This move has been controversial, and some states are taking steps to outlaw it; however, it is still legal in much of the country. While serious debt or a recent bankruptcy filing likely won’t make the ultimate difference in whether or not you get a job (unless you’re applying to a financial position), you may want to prepare to explain the circumstances surrounding your current financial state.
- Debt collectors: In some cases, aggressive debt collectors have been known to contact a debtor at his or her place of employment, even though this sort of behavior is illegal under the Fair Debt Collection Practices Act.
Take Steps Toward Financial Freedom Today
Don’t let worries about your debt hold you back any longer. Talk with a bankruptcy attorney today to find out whether bankruptcy can help you.