The thought of filing for bankruptcy can trigger a number of fears. Unfortunately, these fears prevent people from filing when bankruptcy would actually be a beneficial tool to help them get their financial lives back on track. One of the most common fears is whether or not the filer’s employer will know about the bankruptcy.
If You File for Bankruptcy, Will Your Employer Know About It?
Here’s what you should know about filing for bankruptcy and how it will affect your career:
It is possible for your employer to find out you filed – your bankruptcy will be public record and anyone can search for information about you having filed.
That said, in most cases, your employer is not going to bother searching. There are instances when a potential employer will search for information about you, but most of the time a current employer judges you only on the work you are currently doing, and won’t look for information outside of the workplace unless he or she has reason to suspect there is a problem.
And in most cases, even if an employer, current or potential, finds you filed for bankruptcy, it isn’t going to affect your job. The only time bankruptcy and credit history issues in general are a problem with employment is when a person’s job has them handling large sums of money or making significant financial decisions, or if there is a need for a certain type of security clearance. In these cases, you will be told upfront when you interview for the position and it will be in your employee handbook that filing for bankruptcy could affect your employment.
Bankruptcy Employer Notifications Don’t Exist
Beyond that, your employer will not be notified that you have filed for bankruptcy. There will be no official notice sent and unless your employer searches for information, they will never know you filed unless you choose to share that information.
There are a few exceptions to this, including instances in which your employer or a former employer needs to be listed as a creditor because you owe the company money. Obviously, in that case, they are treated the same as your other creditors and will be notified.
Your employer will also be notified if you miss a payment in your Chapter 13 repayment plan because the trustee will send a request to have your wages garnished. In addition to all of the other reasons you need to keep up with your repayment plan, preventing your employer from knowing you filed is one of them.
Filing for Bankruptcy Shouldn’t Threaten Your Livelihood
Finally, there are a few important things you should realize if whether or not your employer will find out about your bankruptcy is weighing on your mind.
First, you cannot be fired because you filed -for bankruptcy. Doing so violates federal law and is considered discrimination. Unlike other discrimination laws, bankruptcy protection as it relates to employment might not prevent you from being passed over for advancement within a company and employers are allowed to consider how financially responsible you are before promoting you to certain positions.
This article from WorkplaceFairness.com offers more information on laws regarding employment and bankruptcy.
It’s also important to realize that by ignoring your financial problems and allowing them to progress to the point that your wages are garnished and creditors are taking other actions puts you at greater risk for being “exposed” in the workplace than filing for bankruptcy. If you let your financial problems go unattended for too long, your employer will eventually find out what’s happening.
If you are ready to discuss how bankruptcy can help you or you want to find out what you can do to prevent your employer from finding out you’re suffering financially, we can help. Contact the Law Offices of Robert M. Geller at 813-254-5696.