For some people considering bankruptcy filing, they might be concerned how bankruptcy will affect their employment? Can you lose your job because of bankruptcy filing? Are you worried that your employer may find out? Will you ever get hired by the other companies? Even though bankruptcy may have some significance effect on the current job or future employment, the effect is just minimal.
Basically, you also do not have to tell your employer about your bankruptcy filing. It is also best to check the terms and conditions of your employment contract to ensure if there is anything mentioned about you having to inform the company if you go bankrupt. This scenario is applicable most of the time in financial industry.
Can You Get Fired Due to Bankruptcy Filing?
Normally, if a person file for bankruptcy, he will not lose the current job. It is against the law if the employer fire or punish the person because of bankruptcy filing either the company is private or public. Bankruptcy should have no effect on the employment. However, it is not always the same for all cases. A person can still have issues with the following work conditions:
- Employment involves in financial firms – It includes working in bank and the employer is not willing to continue your employment due to bankruptcy filing.
- Working in a management position and obligate you to have a licensed or registered in a certain profession – Bankruptcy will automatically disqualify you in some management position. It applies most with professional career such as accountancy, law, bank and other financial firms. If you think you are not sure if the following above applies in your case, you should immediately talk to your employer.
- Working as an insolvency specialist – a person will automatically get fired with this type of work profession when bankruptcy filing is declared.
- Licensed worker in the gambling industry – It includes croupier or dealer. The license will automatically decline when you file for bankruptcy. However, you can still reapply for your license in the gambling commission.
In this matter, it is important to figure out if your employment is affected before declaring bankruptcy.
Will Your Employer Know About Your Bankruptcy?
The employer will not know your bankruptcy filing either it is under chapter 13 or chapter 7 although bankruptcy is a public proceeding. However, if the creditor garnishes your salary prior to bankruptcy or if the bankruptcy law stops the wage garnishment during the proceeding, the employer will be able to receive an information of a wage garnishment. In case of chapter 13 bankruptcy, the employer will more likely to know your filing due to the court that will order the repayment plans that will be deducted from your salary.
For future employment, some private companies may ask for credit history and this can be a cause for you not to get hired due to financial struggle. In this case, it is better to tell your future employer and explain your situation that led to bankruptcy filing.
For more questions, contact us to help you minimize negative effects on bankruptcy process.