Can Bankruptcy Affect Employment?
While bankruptcy can have many lasting affects, one reassuring certainty is that you cannot be fired from your current position simply on the basis of having filed for bankruptcy. In many cases, employers are not even aware when an employee is undergoing bankruptcy proceedings. For bankruptcy filers who are currently employed, having a secure job is a step in the right direction in overcoming financial hardship.
On the other hand, when seeking new employment, a bankruptcy filing can be seen as a negative mark against a candidate. A hiring manager could see bankruptcy as a sign of irresponsibility, poor money management, or simply an unnecessary stressor that may detract from the job. Additionally, a bankruptcy filing may be of higher concern to employers in specific industries or job roles, as compared to others. For example, having a bankruptcy filing on your record may have a greater impact for someone applying in the financial or banking industry. Also, any position where the candidate may be handling or making decisions regarding money could concern employers.
It’s not uncommon for employers to run a routine background check on all eligible candidates before hiring a new employee. Because background checks can be run to only include certain types of information (i.e. criminal history, etc.) your bankruptcy filing may not always appear in every background check. However, because bankruptcy filings are public records, if the right background check is performed, your filing is available for employers to find. It depends on the capacity of the background check that your employer opts to run to determine whether your bankruptcy filing is discovered.
The one surefire way an employer will discover your bankruptcy filing would be if they perform a credit check. Credit checks are not included with all background checks, but may be done on in conjunction with one. Because a bankruptcy stays on your credit for up to ten years, any credit check done within that time will show the bankruptcy filing.
While a bankruptcy filing cannot 100% determine whether or not you are qualified, trustworthy, and equipped for the job, if an employer wants to use that information in making their decision, they are able to find it. The best way to combat a bankruptcy filing in regards to its affect on your employment is to be up front and be honest. Hiring mangers may make an assumption from seeing a bankruptcy filing in your public record, but hearing the circumstance that caused the bankruptcy from the candidate directly may help them rationalize the situation and be more understanding.
If you are weighing the pros and cons of bankruptcy, consult with an experienced bankruptcy attorney as early in the process as possible. Our licensed attorneys can discuss options as they relate to your specific situation. To set up a consultation, contact our office at (702) 998-1188, firstname.lastname@example.org, or by scheduling a consultation online.