How Bankruptcy Affects Future Job Opportunities

Filing for bankruptcy can have long and lasting negative effects which hinder your ability to reach life goals. Not only do you carry this blemish on your credit for up to ten years, other aspects of your life may be affected as well. This may be the case for individuals with a past bankruptcy who are applying for a new job. While it is illegal for a potential employer to withhold a job offer “solely” based on your credit, a bankruptcy filing may be a red flag for employers hiring an individual who will be working with their money. It is important for individuals who have filed for bankruptcy to understand their rights as well as the rights of the employer before heading into an interview. This may help navigate difficult interview questions and protect your rights to ensure equal employment opportunities.

Millions have filed for bankruptcy

Sadly, there has always been a social stigma associated with bankruptcy. In the past most people assumed if you have filed for bankruptcy you must have done something “wrong” or that you are irresponsible. In some cases that is a correct assumption, however for millions of Americans who have been forced to file for bankruptcy following the recession- it was the only option available to get out from under debilitating debt. This may help change the way bankruptcy is viewed in the future. In any event, understand that you are not alone in this situation and there is nothing to be ashamed of if you are taking the necessary steps to rectify your financial situation.

Bankruptcy and employment

When applying for a job, understand that a potential employer is prohibited from asking questions regarding your credit or past financial problems during the interview process. If you do not volunteer this information, it cannot be used against you. Employers do have the right to check the credit of potential employees and may exercise this right if the job opening involves handling cash, accounting or other financial responsibilities. In order for an employer to check your credit, you must provide written permission to do so. Understand that bankruptcy filings are included in your credit history, therefore your employer will be able to see this information when they check your credit.

Remember that is is illegal to use bankruptcy as the sole reason for dening an applicant a job offer. It is also important to keep in mind that it is difficult to prove bankruptcy was the reason behind not getting a job if the employer claims there were other causes. The way the law is currently interpreted allows for a gray area where employers may use the bankruptcy against applicants but claim other reasons. If you feel this has happened to you, you have the right to file a complaint with the Equal Employment Opportunity Commission.