Bankruptcy is a huge decision that shouldn’t be made lightly. Anyone who considers filing needs to know the repercussions and benefits of filing, including the potential effects it has on employment.
Some people fear that filing for bankruptcy may end in losing their jobs or being unemployable for future positions. While some concerns are valid, participants shouldn’t be afraid of employer action during the bankruptcy process.
Current employment
If you are currently employed and working through a bankruptcy claim, your participation should not change your employment status. Neither private companies nor public employers can take action against an employee that files for bankruptcy.
It’s a massive relief for those who want to recover from debt while maintaining their current job. It may even allow you to get ahead and keep a specific budget throughout the process. It’s a huge benefit and a source of security for most participants.
Future employment
However, the same security isn’t guaranteed if you are applying for a new position. For public employers, they cannot discriminate against you because you filed for bankruptcy. But a private company can make decisions based on any factors they want, including bankruptcy.
Most employers, including private companies, will not discriminate against you, but it’s important to note that there is no guarantee that it won’t affect a job application in the future. Your best bet is to be as aware as possible and know that the long term benefits of bankruptcy will outweigh one position.
If you need guidance about your options, work with a financial advisor or an attorney who can lay out what the best plan is for your situation.
