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Effects of Bankruptcy on Employment

If you're considering filing for bankruptcy as a way of eliminating your debt and getting back on your feet financially, you're probably wondering what effects bankruptcy might have on your future, including employment prospects or on your status at your current job.

The truth is that every situation is unique. To speak with a bankruptcy lawyer directly about these concerns, please fill out this form. You can arrange your free, no-obligation consultation with an attorney near you today.

What Are Some Effects of Bankruptcy on Employment?

It's true that bankruptcy may affect many aspects of your life. Here's a look at what you can expect from current and future employers if you choose to file for bankruptcy.

  • It's illegal to fire someone for filing for bankruptcy. If you're worried about losing your job simply because you've entered into bankruptcy protection, rest assured that, in many situations, certain employers are prohibited from firing an employee for filing bankruptcy. One exception to this rule could be if you work in a position that requires you to manage financial information, you may see some workplace consequences for a bankruptcy filing.
  • Employers may conduct a pre-employment credit check. If you're worried about a past bankruptcy filing affecting your ability to get jobs in the future, check your state's laws. Some states have outlawed pre-employment credit checks, though in much of the country they're still legal.
  • Employers may refuse to hire you for finance-related jobs because of a bankruptcy filing. Even in states where pre-employment credit checks have been outlawed for most jobs, they may still be legal for certain finance-related jobs and jobs that require higher security clearance. And an employer may be backed by the law if he or she opts not to hire you because of a bankruptcy in your past.
  • Debt collectors cannot contact you at work once you've asked them to stop. If you're considering bankruptcy as a way to halt calls from debt collectors, you should know that debt collectors are not permitted to contact a you at work after they have been asked in writing to cease such contact.
  • Debt collectors cannot contact your boss or coworkers if they have your information. Similarly, debt collectors are barred from contacting people at your workplace and telling them about your debt. If you've experienced such harassment, you may want to speak with a bankruptcy lawyer to explore your legal options.
  • Bankruptcy can halt wage garnishment. Thanks to a protection called the automatic stay, filing for bankruptcy can halt collection actions like wage garnishment as soon as your case is filed with the court.
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Find out More about the Effects of Bankruptcy on Employment

Whether you're interested in learning about how a past bankruptcy might affect you in future job search or whether bankruptcy can affect your status at work, you may benefit from talking with a bankruptcy attorney practicing in your area. Simply fill out the case review form on this page to connect with a lawyer near you today.


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