Debtors often file bankruptcy too quickly without first considering what, if any, ramifications a bankruptcy may have on their current employment or future employment opportunities. Luckily, in most instances, filing bankruptcy should not affect your current employment, but could play a role when applying for a new employment opportunity and this is why:
If you file a Chapter 7 Bankruptcy it is actually unusual for your employer to find out that you have filed for bankruptcy unless a creditor has an active wage garnishment order against you. You will then have to inform your employer of the bankruptcy in order to stop the wage garnishment from continuing, but, in reality, if your employer was already served with a wage garnishment order, then they already know you have been having financial difficulties and may even welcome the bankruptcy.
If you file a Chapter 13 Bankruptcy your employer will still only find out of the filing if, like with a Chapter 7, you have a wage garnishment order against you. Your employer may also find out if your bankruptcy Trustee requires a wage deduction order. A wage deduction order requires your employer to deduct your monthly Chapter 13 Plan Payments from each of your paychecks and to send it directly to your Trustee in an attempt to help you keep your Chapter 13 Plan Payments current.
Unfortunately when it comes to finding new employment, even though it may be illegal, some potential employers may use having filed bankruptcy as one of the many reasons to quickly and easily sort through job candidates. There are also other jobs you may apply for where having filed bankruptcy could be a genuine concern. Jobs that deal with finances, such as accountants, CFOs, pay-roll workers and bookkeepers, just to name a few, could deny you employment opportunities due to the fact that your ability to appropriately manage, invest or appropriate funds are very important. Yet sometimes filing bankruptcy could make finding new employment easier. Some employers take your level of debt into consideration stating that you are at a higher risk for theft and blackmail if you have a lot of debt. By filing bankruptcy, you have effectively lowered your level of debt.
When seeking new employment after having filed bankruptcy, it is simply best to just be upfront and honest about it. Explain to your potential employer the reasons why you were forced into filing bankruptcy in the first place. Maybe there was an unexpected death in your family, your spouse suddenly left you leaving you with a lot of debt to deal with by yourself, or maybe there was a medical emergency. It is also a good idea to ask your previous employers to provide strong recommendations. The chances are that your potential employer is simply just trying to find a trustworthy and hardworking employee. Finally, if your potential employer asks for permission to run a credit check, you should give your consent, but make sure you advise them of the bankruptcy first. Although an employer cannot refuse to hire you because of filing bankruptcy, they can refuse to hire you for failure to consent to a credit check.