Will Filing For Bankruptcy Affect My Job?

Will Filing For Bankruptcy Affect My Job?

When you find yourself underwater financially and feel like there is no way out, we want to assure you that help is indeed available. Bankruptcy is one option that does not deserve the stigma it gets. While it may not be the optimal choice for everyone, the fact remains that thousands of households each year prolong their financial hardship by refusing to give bankruptcy a meaningful look.

One common misunderstanding about bankruptcy is how it could affect your current employment status. Employers are not legally allowed to discriminate against individuals for filing for bankruptcy. In many cases, your employer may not even be aware you ever filed.

At Hoskins, Turco, Lloyd & Lloyd, we understand that filing for bankruptcy is a nerve-wracking process. You are worried that your credit will be impacted for the foreseeable future. You are worried that you will not be able to keep your home or your possessions.  You are worried that your job may be affected. We want to assure you that bankruptcy should never affect your current employment. Let’s take a closer look at what you need to know about filing for this type of financial relief.

Will My Employer Find Out That I Filed Bankruptcy?

We can’t promise you that your current employer will never find out about your bankruptcy filing. There are typically three instances in which your employer will discover that you’ve made this move to rid yourself of debt:

1. You currently have actively garnished wages. When this is the case, your employer will discover that you filed bankruptcy when they are ordered to stop garnishing your wages. Your attorney will contact your employer or the payroll department to inform them of the petition and the temporary stay orders.
2. You file Chapter 13 bankruptcy. This type of filing allows you to restructure your debts and allow you to pay your creditors. If the judge orders that your creditors are paid directly from the court, your employer may be notified to send a specific amount of your paycheck to the bankruptcy court.
3. You are in debt to your employer. If you owe money to your employer and the debt is included in your bankruptcy filing, they will be informed to cease attempts to collect the debt because it has been discharged.

Can My Boss Fire Me Because I Filed Bankruptcy?

Your employer is not permitted, under law, to fire you on the basis that you filed for bankruptcy. Your employer is also not permitted to change your job or contract. Your salary cannot be reduced, you cannot be demoted, and responsibilities cannot be taken away.

It’s important to understand, however, that while you could potentially have a discrimination suit if you are fired because you filed bankruptcy, you are not completely protected. Like many other states, Florida has “at-will” laws that allow an employer to fire employees without proving cause, so long as they aren’t directly discriminating against someone because of their protected status. If your employer has another valid reason to terminate you, it could be justified using other reasons than your bankruptcy.

What About Securing New Employment?

This is where you could potentially run into a problem. The government cannot use your bankruptcy as a reason to not hire you. A private employer, on the other hand, can If the job you are applying for requires that you conduct accounting, bookkeeping, or have to deal with money in any way. In these cases, bankruptcy could prevent you from securing the job.

In some instances, you may be tempted to refuse to allow your potential employer to run a credit check. The feeling is reasonable considering the bankruptcy filing. Should you refuse to allow the credit check, however, the employer can refuse to hire you.

What About Security Clearances?

If you work for a federal agency or another job that requires security clearance, you may be worried that bankruptcy will affect that clearance. We have found that this isn’t necessarily the case. 

It is true that people who are heavy in debt are looked upon as more likely to be blackmailed. It makes sense when you think about it. When you file bankruptcy and that debt is removed, however, a person’s chances of being tempted or coerced are dramatically reduced.

Is It Worth Taking The Chance to File for Bankruptcy?

Our Florida bankruptcy attorney would say yes. When you are buried in debt, your life is affected. You are stressed, you can’t sleep, and you may become less engaged in a variety of life’s roles. 

Could your employer find out that you filed for bankruptcy? Yes. Could bankruptcy cause you to lose your job? No — not if there is no other reason for your employer to terminate you. Could it affect your job prospects in the future? That really depends on the type of job you are looking for, but it certainly doesn’t affect jobs in every sector.

Overall, the biggest impacts of bankruptcy are how it affects your immediate credit and ability to obtain financing. However, when the alternative is to remain in debt longer, the benefits can outweigh the consequences. You should always consider your situation carefully, and reviewing your options with a Florida bankruptcy lawyer can help.

We Are Your Florida Bankruptcy Attorney

When you are ready to take steps to rid yourself of the financial stress you have found yourself in, call (866) 460-1990 or contact us online to schedule an appointment to discuss your options. We don’t believe that you or your family should feel as if you are constantly taking two steps forward and one step back. Financial freedom can be returned to you. 

Our bankruptcy attorney can take a closer look at your debts and your income. We can help you determine if bankruptcy is the right solution for you or if there are other more feasible options available. Contact us at your convenience to take the first steps toward getting your life back on track.