If you’re considering filing bankruptcy, the last thing you should have to worry about is whether it will impact your job. You aren’t going to tell your employer about your financial situation. However, what if they find out? Can they fire you?
The good news is that the bankruptcy code prohibits employers (both private and government ones) from firing or otherwise discriminating against employees because of a bankruptcy. Unfortunately, however, that doesn’t mean they can’t find another reason to fire someone because they’re concerned about their bankruptcy.
In “right-to-work” states like Indiana, employers don’t even need a reason to fire someone, as long as they don’t do it for an illegal reason — for example, because of their race or other protected status.
Similarly, if you are in a profession that requires you to be licensed, you can’t be denied a license solely because of a personal bankruptcy. However, most licensing boards have professional standards. Depending on the circumstances behind your bankruptcy, if a board determines that you have been seriously negligent in personal financial matters, it could be an issue.
What if you work in a position where you have access to money, and your employer regularly does credit checks to ensure that their employees aren’t in a precarious financial situation that could make theft particularly tempting? While they may still not be able to fire you for filing bankruptcy, if your credit score has dropped significantly, that could pose a problem.
What about future employment? If you’re asked, either on an application or directly by a potential employer, whether you’ve ever filed bankruptcy, it’s important to be honest. That doesn’t make you unemployable. In fact, if you’re prepared to explain that you took control of your financial situation, have learned from your mistakes and are taking steps to be responsible with your money, that can prove to be a plus for you.
If you’re concerned about how bankruptcy will impact your current or future employment, it’s wise to discuss the matter with your bankruptcy attorney. They can provide you with information about your rights and help you take steps to minimize the impact on your career.