Many Florida residents might find that they have to file for bankruptcy to alleviate their debt. However, this often carries a stigma. You might wonder whether your current or future job might be affected as a result.
What happens when you file for bankruptcy?
When you file for bankruptcy, you get an automatic stay to prevent your creditors from trying to collect what you owe. This means your creditors cannot try to garnish your wages, get money from your bank account or get their hands on your assets.
Through bankruptcy, some of your debts are eliminated while others are not. Your unsecured debt such as personal loans and credit card debt can be eliminated while obligations like child support payments remain intact.
Can you lose your job for filing bankruptcy?
By law, filing for bankruptcy does not give any employer the ability to terminate an employee. Employers cannot legally demote you, lower your salary or remove any normal job tasks. However, they can take action for other reasons such as insubordination, habitual lateness or being bad at your job. Bankruptcy has no bearing on any of that. However, if you are terminated shortly after your employer learns that you filed bankruptcy, you may have grounds to file a discrimination lawsuit.
Can bankruptcy affect your job search?
If you’re searching for new employment, some employers will do a credit check, which can reveal whether you have ever filed for bankruptcy. Certain types of jobs, particularly those involving finance, management or government, are more likely to perform a credit check due to the sensitive information employees are expected to handle. By law, you must give permission to employers to check your credit. If bankruptcy has adversely affected your score and reputation, you might want to temporarily avoid applying for positions that involve handling finances or confidential data.