When you file for bankruptcy in New York, you’ll be notified of the consequences that may follow, such as a drop in your credit score and higher interest rates. But what many people aren’t sure of is how their bankruptcy will affect their employment. You’ll be glad to know that bankruptcy shouldn’t affect your current or future jobs.
The Law Office of William Waldner takes time to explain the bankruptcy process, how it can help solve financial challenges and what to expect after. We want our clients to be fully informed on their options. Bankruptcy is meant to give you a fresh start, but there are a few things to know about its effect on employment.
Below you’ll find more information about bankruptcy and how it can impact your job today and in the future.
Can You Lose Your Job Due to Bankruptcy?
Simply put, you cannot be fired from your job because you filed for bankruptcy. An employer also can’t use a bankruptcy filing as a reason to change the conditions of your employment. For example, your employer can’t reduce your salary, demote you or take away your responsibilities.
If your employer does fire you shortly after learning of your bankruptcy, you might have an illegal discrimination case on your hands. But, if you’ve been having trouble at work, such as by showing up late or being dishonest, bankruptcy won’t protect you from getting fired.
Will Your Job Know that You Filed Bankruptcy?
The bankruptcy court will publish your bankruptcy filing. All bankruptcy filings in New York are public records, with the exception of sensitive information like Social Security numbers, account numbers and minor children’s names and birthdates.
However, it’s not likely that your employer will go looking for your bankruptcy case if they don’t know you filed one. You are also not required by law to inform your employer of this. Nevertheless, there are still some ways that employers can find out:
- You have a wage garnishment. Employers are typically notified of a wage garnishment. While filing bankruptcy can stop this, your employer will still be aware of these difficulties.
- You have a Chapter 13 repayment plan. In some bankruptcy courts, the judge will require you to deduct your Chapter 13 payments from your wages and to the trustee responsible for your case. Your employer then acts as a collection agency.
- You owe your employer money. If you owe money to your employer, such as paying back a payroll overpayment, you’ll have to include it in your bankruptcy filing.
To summarize, your employer isn’t likely to find out about your bankruptcy filing, unless you tell them, and you are not required to do so.
How Will Bankruptcy Affect Future Employment?
By law, no federal, state or local government agency can consider your bankruptcy when deciding whether or not to hire you. Private employers in New York are a bit different, however. They can request a background check that includes a credit report.
While private employers can’t fire you because of your debtor status, they can take your bankruptcy into consideration during the hiring process. Private-sector employers can also refuse to hire you if you don’t give consent for them to check your credit history.
If you plan on applying for a new job, we recommend being prepared to talk about your bankruptcy case. If your potential employer requests a credit report, they will find out about your bankruptcy. Therefore, it’s best to be open and forthcoming about the experience and how you’ve learned from it.
Start the Bankruptcy Process Today
Filing for bankruptcy in NY might not be something you saw yourself doing, but it’s an effective way to resolve your debts and get a fresh start. Instead of drowning in debt that you can’t pay back, you can rebuild your life. You do not have to notify your employer of the bankruptcy. And chances are, they won’t find out.
If you do plan on applying for a new job in the future, it’s possible that your bankruptcy will turn up during a credit check. Be prepared to talk about the bankruptcy – it’s nothing to be ashamed of! Many Americans struggle with bad credit or unpaid debt. What’s most important is how you handle this situation.
To learn more about filing for bankruptcy in New York, contact the Law Office of William Waldner today.