Filing for bankruptcy raises concerns beyond financial implications, particularly regarding employment. Many individuals often fear that their financial decisions might jeopardize their current job or future employment opportunities.
Understanding the intersection of bankruptcy and employment rights is key to protecting oneself and ensuring fair treatment in the workplace.
Legal protections for employees
Federal laws protect employees who file for bankruptcy, preventing employers from terminating them solely based on their financial circumstances. These protections help individuals seek financial relief without the fear of losing their job.
Confidentiality of bankruptcy status
Most employers will not learn of an employee’s bankruptcy unless the employee tells them. While filings are public, they are not easy to access without specific reasons. An employer may only discover the bankruptcy if they need to process a wage garnishment. This privacy allows an individual to manage their financial issues without workplace concerns.
Impact on job applications
The effect of bankruptcy on job applications can vary. In most private sector jobs, employers do not check bankruptcy records when hiring. However, some jobs, especially in finance or management, might require a credit check, where bankruptcy could factor into the employer’s decision.
Bankruptcy and government jobs
In government jobs, bankruptcy usually does not affect hiring. At the federal, state and local levels, employers must not discriminate against applicants who have filed for bankruptcy. This rule helps ensure that a person’s financial status does not harm their chances of getting hired.
Effect on professional licenses
Some professions require a license, and financial reviews might be part of the licensing process. Although bankruptcy can raise concerns about financial responsibility, it does not stop someone from getting or keeping a professional license.
By knowing these rights, an individual can get through potential challenges and protect their career moving forward.