business bankruptcy

Can I lose a job opportunity by filing bankruptcy?

A common reason for filing bankruptcy is due to a job loss. So how bankruptcy affects job search is a common concern of people looking into bankruptcy.  Fist you need to understand that the bankruptcy laws protect you from being fired due to a bankruptcy filing.  How bankruptcy affects job search an employer cannot legally fire you just because you filed for bankruptcy. In some cases your employer will find out about you filing for a bankruptcy, but most bankruptcy filings won’t affect your employment. The bankruptcy laws prohibits both government and private employers from terminating your job due to your bankruptcy filing. But if you are applying for a new job, the protection is not so broad.

So few things you might like to consider when looking for work after filing bankruptcy is the fact that some employers do a credit check and will see your bankruptcy on your credit report so how bankruptcy affects job search.  How an employer weighs this is up for debate, since in most instances the bankruptcy filing make you actually more financially secure,  in the long run since, you no longer have debt hanging over your head.  Second, a government agency can automatically deny you employment because of a bankruptcy.  Third,  private business may deny you employment because of a bankruptcy if they have good cause. For example, if the job would require you to manage money, your bankruptcy might be perceived as a negative. In most cases, neither private nor government employers will deny you employment because of a bankruptcy. Since so many people file bankruptcy exclusion based on that one factor would mean excluding many otherwise competent candidates.  The older your bankruptcy, the less likely it will have an impact on your job search.  finally a word about security clearance, if you’re working for (or seeking) a job that requires a security clearance, your bankruptcy may actually work in your favor. Certain jobs at the CIA or FBI may be difficult to get if you have a lot of debt because it would make it more likely that you would be tempted by bribes. However, since bankruptcy wipes out your debts, chance of you being bribed decreases.

From my experience filing a bankruptcy doesn’t not play a major factor in not being able to get a job after the bankruptcy.  Has it occurred in the past – yes but the perception of bankruptcy has changed dramatically over the past 5 years and this being the factor in how bankruptcy affects a job search is slim in my opinion.  If you are an employer and reading this trying to determine if hiring someone for a job that has filed bankruptcy I think you need to look beyond the bankruptcy and focus on the real life experience that the person can bring to your organization.

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