In Debt? How Consolidating Your Credit May Help

Once the decision to file for bankruptcy is made, you might begin to have some second thoughts. You may already understand that filing will affect your credit, but you may worry about its effect on your career. To get more information about how chapter 7 bankruptcy could affect things with your employer, read on.

How Will They Know?

In most cases, your current employer has no ready way of knowing about the bankruptcy unless you tell them about it. They might put two and two together, though, in certain circumstances. For instance, if you were subject to wage garnishment previously, they already know about your financial troubles. Once you declare bankruptcy, that garnishment may end. Your employer might think you've just paid off your debt, or they might suspect you've filed bankruptcy.

Can You Be Fired?

Many states use what is known as "at-will" employment security – meaning you can be fired for any almost any reason. Very few employers, however, will fire you based on filing for bankruptcy. If they do find out about it and view your continuing employment as undesirable, they can fire you for other reasons.

What About Future Employment?

Most jobs won't involve that level of scrutiny, but certain positions that deal with sensitive or financial information may involve a credit check as part of the pre-employment background check. If you are applying for a government job, you cannot be discriminated against for filing for bankruptcy. If the job is with the private sector, however, your bankruptcy could be considered along with other aspects of your personal qualifications. The only way this information is easily revealed is through a credit check, and you must sign a consent form to allow that. If you've applied for a job and know your credit will be checked, it might be best to be upfront about the bankruptcy with your employer. In many cases, it won't affect your job prospects.

Security Clearance Issues

Depending on the type of security clearance you have, you may have several years before the clearance is renewed. That means you won't need to be concerned about the filing for the time being. If your clearance is about to expire, the presence of bankruptcy is not necessarily a bad thing. Security clearances are supposed to vet people who, among other things, are vulnerable to corruption for financial gain. Once you declare bankruptcy, your financial vulnerability can decrease substantially.

Don't let job concerns keep you from getting the debt relief you need. Speak to a bankruptcy lawyer about your situation today.