Bankruptcy represents a significant problem not only for your financial future, but also for your career. While many may focus on how bankruptcy can wreck your credit, it pays to know that bankruptcy can sometimes cost you your current job or make it difficult to get a good job in the future. While there is no categorical rule on how bankruptcy will impact your career, there are several things that you should know when deciding whether or not to declare bankruptcy.
Federal law provides some protections for people who file bankruptcy. According to the law, both private and government employers are not allowed to fire you or take other action, like reducing your salary, because you have chosen to file bankruptcy. While this rule should provide you with some solace, it is possible for employers to fire you for other reasons after you file for bankruptcy. While the law provides protection in theory, it can be very easy for employers to find legitimate reasons to fire you that can justify a post-bankruptcy termination.
If you hope to work in a government job in the future, you’re in luck. Government agencies are not allowed to discriminate against bankruptcy filers in their employment decisions. There is one exception to this rule. If you are looking for the sort of government job that requires a security clearance, your credit history and bankruptcy filing may stand in the way of getting the job.
While the law does keep government agencies from holding your bankruptcy against you, there is no such categorical rule for private employers. Many find that private employers will hold your credit against you, and a bankruptcy is one of the major strikes that often keep people from obtaining a job in the future.
Any job that requires you to work closely with money will scrutinize your credit more closely. Bankruptcies can make it particularly difficult to get jobs in accounting and finance. Employers contend that a past bankruptcy is representative of poor habits and represents a risk to them. This is one of the reasons why the professionals at places like Paddon & Yorke Inc work so hard to come up with targeted solutions for people in financial trouble. Mississauga bankruptcy trustees recognize that there can sometimes be better options to keep people from struggling through the consequences of bankruptcy.
Ultimately, a bankruptcy may have a substantial impact on your career. While it is not likely that your current employer will fire you for filing bankruptcy, future employers – especially in the private market – will often take note of your plight. Landing that dream job in finance or the legal field may become substantially more difficult.