Many people are concerned about whether they are employable after filing for bankruptcy. Generally speaking, bankruptcy doesn’t have to have an impact on your future employment prospects. There are certain narrow fields (in the financial field, for example), where problems would undoubtedly arise. But generally speaking, many employers would be happy that you had put your financial worries behind you and could move forward with a fresh start.
60% of employers look at credit reports when considering hiring or promoting, but they aren’t necessarily very concerned with bankruptcy.
Top 3 Items Employers Look for on Credit Reports:
- Outstanding Judgments: dealing with garnishment as an employer is a major annoyance. They don’t like to deal with it and want to avoid it at all costs.
- Debts and Collection: debt and collection today is a judgment tomorrow, potentially, which brings it right back to the number one thing employers don’t want to see on your credit report.
- Bankruptcy: bankruptcy is the third thing that employers will look for. Interestingly enough, it is also the one thing that will completely take care of the first two problems employers actually want to avoid.
The most important thing to consider regarding your prospective employment, bankruptcy and your credit report is that a new employer doesn’t know you. Your resume is only your best work. Your referrals are from people who like you. Looking at a credit report is one of the only methods open to employers who would like to get an honest depiction of who you are before they actually know you. It provides a basic sense of your lifestyle. It can be seen as a means of defining you as responsible, disciplined, etc. Having said that, in many cases, there are situations out of our control that can lead to bankruptcy.
Before you worry too much about the effect of bankruptcy on your employment, remember that no one can pull your credit report unless they have your signed authorization. When they obtain that authorization from you, take a moment and strike at the problem before it’s in front of them. Provide your explanation of extenuating circumstances leading up to bankruptcy. Tell them simply why it was out of your control, why it was out of character, and why it would be unlikely to ever happen again (lost job, divorce, medical problem, etc.) Explain what it was that disrupted your life and led to the situation that was out of the norm and therefore not likely to ever happen again.
Generally speaking, employers are looking for negatives on your credit report, but bankruptcy isn’t the one they are trying to avoid. Additionally, many individuals seeking employment after bankruptcy have found that disclosing the bankruptcy immediately usually helps put their prospective employer at ease. It seems to humanize the applicant and may even improve their perception of you as you are being completely honest and up front about the situation.
For more information on how bankruptcy can affect your career, talk to a bankruptcy lawyer at Westgate Law.