How Will Bankruptcy Affect Me in the Workplace?

Many people equate bankruptcy with the loss of everything and a stain that will stick with them going forward, but that’s far from the truth. Bankruptcy is designed to give people who are overwhelmed by debt a fresh financial start, and rarely does it result in losing everything.   

The bankruptcy code has built-in exemptions so you can keep many of your possessions even if you file under the liquidation plan, Chapter 7. And the reorganization plan, Chapter 13, allows you to keep virtually everything so long as you haven’t lost a car through repossession or a home through foreclosure.  

But people still worry about how filing for bankruptcy will affect their job or their job prospects going forward. In certain industries, generally, those that deal with money or finances, a filing might present some challenges, but for the most part, your current employer will probably never find out except under certain circumstances.  

If debt is overwhelming you in or around Tampa, Florida, and you need to get a fresh start in life, contact The Law Offices of David K. Blazek, P.C. for reliable legal assistance. A bankruptcy attorney can help you evaluate your best option and then help you navigate the process until you’ve obtained the fresh start you seek. The firm helps clients in Miami, Jacksonville, and Orlando, as well as in Atlanta, Macon, and Columbus, Georgia. 

Will Bankruptcy Affect My Current Job? 

Your employer will not be notified of your bankruptcy filing, but your case does become a matter of public record, though most employers don’t know how to access that record. To do so, they would have to use the Public Access to Electronic Records (PACER) system and will likely have to pay a fee to do so.  

There are a few situations that may lead to your employer finding out about your bankruptcy. One is if you are having your wages garnished by a creditor. To stop the garnishment, you would have to notify your employer of your filing. Another situation would be if you owed the employer money that you would want to be discharged under bankruptcy. Finally, under Chapter 13, some bankruptcy courts will require that your monthly payment be deducted from your wages.  

However, even if your employer does find out about your filing, they are not allowed to terminate, demote, or take any other kind of action against you. Still, they may use your filing as a sort of negative mark on your character and start examining your behavior more closely. In certain industries as well, bankruptcy may pose a bigger challenge moving forward, which we discuss next. 

Jobs That May Be Affected by Bankruptcy 

Jobs that deal with money, jobs in law enforcement, and jobs that require security clearances represent the industries most likely to be concerned about your bankruptcy filing. Employers such as banks and financial institutions or any business that handles cash, have a legitimate concern that a person who is undergoing bankruptcy might be tempted to steal or otherwise take advantage of their position.  

People in law enforcement need to handle sensitive materials, including drugs and guns, that can be sold under the table. If you file for bankruptcy, the agency you work for can’t fire you merely for filing, but they may withhold your access to these sensitive materials, which would amount to a demotion.  

Jobs that require a security clearance include credit checks. If you’re in debt or already in bankruptcy proceedings, and you’re in one of these industries – think FBI, CIA, the military, and government contractor jobs – your financial history could lead your employer to limit your access to sensitive information, which could lead to a demotion of sorts. 

Will Bankruptcy Affect Getting Hired? 

The industries mentioned above will almost invariably run a credit check before hiring a candidate, as might many other businesses. They can’t run the check without your permission, however.   

So if you’re applying for a job that requires a credit check, you’ll have to be upfront about your financial history, including bankruptcy. Though you can’t be terminated solely for filing bankruptcy if you’re already employed, a prospective employer can decline to hire you based on your credit record. 

Understand What to Expect in Bankruptcy 

If your debt load is out of hand and you need to reorganize or liquidate to move forward in life, contact The Law Offices of David K. Blazek, P.C., which serves clients in Florida and Georgia. A knowledgeable attorney will explain the entire process to you and advise you on what to expect and what to do if your filing might cause a ripple for you on the job market.   

The main point in a bankruptcy filing is to get your debts behind you so you can enjoy the fresh start that results from the proceedings. Reach out today if debt is overwhelming you.