Will Bankruptcy Threaten Your Job Security?

Hard-working individuals may be facing Chapter 7 bankruptcy no matter how they try to avoid it. While filing for Chapter 7 bankruptcy requires a lot of thought and consideration, like most things, the impact is not as severe as some might think. One aspect of bankruptcy some worry about is how it might affect their employment. For those concerned about their job security after filing Chapter 7 bankruptcy, learn more by reading below.

Your Employer Might Not Find Out

Unless you feel compelled to tell your employer about the bankruptcy filing, they might not find out. Nothing about the bankruptcy process involves contacting an employer. If your supervisor does learn about your bankruptcy filing from office gossip, it might not matter as much you fear. Many people declare bankruptcy each day, and you are joining an ever-expanding group of people. One point to keep in mind about financial issues and employment, though, concerns wage garnishment. When you get sued by a creditor, your wages can be garnished and your employer is sent an order instructing them to withhold money from your paycheck. You can prevent that potentially embarrassing event from happening by beating your creditor to court. File for Chapter 7 before they sue you, and your employer may never learn of your financial problems.

Security Clearances and Bankruptcy

If your current or future job requires a security clearance, your firm may find out about your bankruptcy. If your job involves national security or you work in certain job sectors, these types of checks help ensure that employees are not in a position that makes them vulnerable to those who would pay for secure information. They might also reason that those who have already filed for bankruptcy are safe from such exploitation.

Background Checks and Bankruptcy

Banking, investment brokerages, and other careers in the financial industry often perform background checks. If you handle money in any shape or function, you may be subject to a complete background investigation that includes a credit check along with a check of your criminal record. That is because those with money troubles may be more likely to commit crimes like embezzlement against a business. If such a check is performed, your bankruptcy filing will be obvious to that employer. Whether or not it will affect your job chances depends on many other factors but, just as with security checks, you may be perceived as less of a threat once you have filed bankruptcy.

For more information about filing for bankruptcy, speak to a bankruptcy lawyer about your financial situation.