When you plan on filing for bankruptcy, one of the questions you may have is how it’ll affect your job. The simple answer is that while your employer may learn about your bankruptcy case, typically, this won’t affect your current employment. Where this gets complicated is that bankruptcy could prevent you from getting a job in the future, especially if you want to work in a private industry. Of course, there are other questions regarding this topic that you should also know about and understand.
Will you lose your job after filing for bankruptcy?
An employer can’t fire you just because you filed for bankruptcy, nor can they use your filing as a reason for changing other terms and conditions in your employment contract (e.g., demote you, reduce your salary, remove responsibilities).
When your employer fires you because you’ve filed for bankruptcy and there aren’t any other justifications given, you may have a case against them for illegal discrimination. However, just because you’ve filed for bankruptcy doesn’t mean that you’re shielded from other employment misconduct (e.g., tardiness, dishonesty, incompetence). In cases like this, you won’t have a case against your employer for illegal discrimination.
Does the bankruptcy court publish my bankruptcy filing?
Every bankruptcy filing becomes a part of public records. There you’ll find everything but sensitive information (e.g., Social Security numbers, account numbers, minor children’s names, and birthdates). However, using the court’s Pacer system to look at a bankruptcy case isn’t a simple process. So unless your boss knows that you’ve filed for bankruptcy, they probably won’t check your bankruptcy status.
Does the Bankruptcy Trustee contact my employer?
While employers can find out about bankruptcy filing, bankruptcy trustees don’t routinely call them. The court also won’t send a notice of the bankruptcy case out to your employer.
How will my employer learn that I’ve filed for bankruptcy?
While employers rarely discover that you’ve filed for bankruptcy, there are a few ways in which they may do so, including:
- A wage garnishment: In this case, your employer is acting like a collection agency.
- Filing for Chapter 13 payments: The judge may require your employer to deduct your Chapter 13 bankruptcy payments from your wages and send them directly to the trustee who’s responsible for your case. You owe your employer money. You must list all your debts when filling out your bankruptcy paperwork. For instance, if you’re paying back a payroll overpayment, you’ll have to include it, and your employer will get notice of your bankruptcy case.
- Security clearances: Employers (e.g., the armed forces, CIA, FBI, government agencies, and private companies that contract with the government) are made aware of your filing for bankruptcy.
Am I at risk of losing my security clearance after filing for bankruptcy?
You probably won’t lose your security clearance after you’ve filed for bankruptcy. In fact, you may be surprised to learn that filing for bankruptcy may even prove beneficial here. This is because credit counselors for the CIA and the military say that people who have a lot of debt are thought to be great targets for blackmail. Bankruptcy is the best way to lower such risk, which is why it’ll typically works in your favor.
How does bankruptcy affect me when looking for a new job?
When applying for a job with a federal, state, or local government agency, they can’t hold your bankruptcy against you. However, private employers can and may choose to do so if your job deals with money (e.g., bookkeeping, accounting).
Who can help me file for bankruptcy?
There are a lot of factors to consider before filing for bankruptcy. This is why you need the experienced lawyers at the Weller Legal Group in Tampa, FL, on your side. We’re here to help you every step, so contact us today.