When you are struggling with finances and considering bankruptcy, you may be concerned about how a bankruptcy filing will impact your job and career. Filing for bankruptcy does not have the same stigma it once did and is often viewed as a smart financial strategy.
However, whether a bankruptcy filing could affect your job depends on various factors.
You must consider how bankruptcy will affect both your current job and future job prospects.
Current jobs
First, it is important to know that your employer cannot fire you because you file for bankruptcy. Federal law prohibits employers from firing or retaliating against employees because they filed for bankruptcy.
Unfortunately, this does not stop some employers from discriminating against current or potential employes because of a bankruptcy filing. Examples of retaliation include demotion, harassment or reduction in salary.
However, you have no obligation to tell your employer you are filing for bankruptcy. There is no law or rule requiring you to inform your employer about your bankruptcy.
It is true that the bankruptcy will be on a public record, but most employers are not going to search for a bankruptcy on an employee’s record.
If your employer does find out about your bankruptcy and questions you about it, you should be honest. Putting a positive spin on the situation, such as using it to show that you have taken control of your situation and are committed to getting your finances in order, can help.
Future jobs
There is a higher chance of bankruptcy affecting future job prospects. Many employers perform background checks on potential employees and bankruptcy is likely to show up.
Therefore, potential employers are more likely to know about your bankruptcy filing. The good news is that under federal law, government employers cannot discriminate against you because of bankruptcy.
However, government employers can choose not to hire you for other reasons aside from your bankruptcy filing. Just because they cannot discriminate against you because of bankruptcy does not mean that you will be hired.
The bad news is that private employers are not subject to this law and can choose not to hire you because you previously filed for bankruptcy.
If you are passed over for a job because of your previous bankruptcy, you will likely never know this was the reason. Most employers will not tell you the reason or simply say that they chose another candidate.
Although this may sound disheartening, some employers will not hold your bankruptcy against you. You should not assume that you will never be hired by a private employer if you file for bankruptcy but understand that getting hired may be a little more challenging.
Professional licenses
If you have a job that requires a professional license, you might need to report a bankruptcy filing to your employer or professional licensing board.
You should never fail to report a bankruptcy filing if you are required to do so. Bankruptcy might not affect your professional license, but failing to report it very well could.
Before you file bankruptcy in Indiana, it is best to learn how bankruptcy could impact different areas of your life, including your career.
