{"id":286950,"date":"2021-01-12T08:36:37","date_gmt":"2021-01-12T13:36:37","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/bankruptcy\/what-is-bankruptcy\/ask-a-lawyer-can-bankruptcy-affect-your-job-prospects.html"},"modified":"2023-11-04T09:25:08","modified_gmt":"2023-11-04T14:25:08","slug":"ask-a-lawyer-can-bankruptcy-affect-your-job-prospects","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/bankruptcy\/what-is-bankruptcy\/ask-a-lawyer-can-bankruptcy-affect-your-job-prospects.html","title":{"rendered":"Ask a Lawyer: Can Bankruptcy Affect Your Job Prospects?"},"content":{"rendered":"\n
\n \n
\n

Ask a Lawyer: Can Bankruptcy Affect Your Job Prospects?<\/h1>\n
\n
\n By FindLaw Staff<\/a> | Legally reviewed by Susan Mills Richmond, Esq.<\/a>\n | Last updated\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
\n

This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
\n

The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n

Completing your bankruptcy case means experiencing debt relief after struggling with financial problems. But, as you probably already know, the chance to start over does come at a cost. It’s normal to wonder, "Will bankruptcy affect my job?"<\/p>\r\n

So, can\u00a0filing bankruptcy<\/a>\u00a0affect your current job or future job prospects? Generally, personal bankruptcy won’t affect your current employment. But it could prevent you from future employment opportunities in the private sector.<\/p>\r\n

Will My Employer Find Out About My Bankruptcy?<\/h2>\r\n

The law does not require you to inform your employer if you file for\u00a0Chapter 7<\/a>\u00a0bankruptcy or\u00a0Chapter 13<\/a>. It is rare for employers to find out this information.<\/p>\r\n

If someone is garnishing your wages your employer will generally find out. In that case, your employer must notify them to stop the wage garnishment after debt discharge.<\/p>\r\n

If you file for Chapter 13 bankruptcy, a few jurisdictions require that your paycheck deduct your\u00a0debt reorganization repayments<\/a>. This would mean informing your employer of the situation.<\/p>\r\n

Finally, if your employer is one of your creditors, it will likely receive notification of your filing.<\/p>\r\n

If none of these situations apply and you choose not to tell your employer about your bankruptcy, chances are they won’t find out. You then don’t have to worry about potential job loss.<\/p>\r\n

Can Employers Fire Me or Reject My Job Application Because of My Bankruptcy?<\/h2>\r\n

Even if your employer finds out about your bankruptcy filing, they can’t fire you for that alone. That’s because federal law protects debtors from\u00a0employment discrimination<\/a>.<\/p>\r\n

If you have ever encountered a hiring process that required you to submit a background check and a credit report, you might wonder if it’s allowed.<\/p>\r\n

Under current law, private-sector employees can’t fire you because of your debtor status. But they can consider it when making hiring decisions. Private-sector employers can refuse to hire you if you don’t permit them to check your credit history.<\/p>\r\n

Most employers will only base their hiring decision on a credit check alone if it directly relates to the work you would be doing. It is only one factor often considered among many.<\/p>\r\n

If the issue arises during the application or interview process, it’s best to be open about the experience. You can frame it as something you learned from. Many Americans have bad credit or face serious debt from credit cards, medical bills, or student loans.<\/p>\r\n

Discrimination Laws and Bankruptcy<\/h2>\r\n

As mentioned, federal law bans government and private-sector employers from discriminating against those who have filed for bankruptcy protection.<\/p>\r\n

The laws that prohibit discrimination against debtors who have filed for bankruptcy are under bankruptcy law in the\u00a0U.S. Bankruptcy Code<\/a>. That’s the federal law that oversees bankruptcy proceedings.<\/p>\r\n

Government Agencies<\/h3>\r\n

Section 525 of the Bankruptcy Code says that government agencies may not:<\/p>\r\n