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How can bankruptcy affect your employment prospects?

One of the concerns that people have about filing for bankruptcy is how it will affect their employment prospects in the future. Employers cannot legally deny people employment or advancement due to something on their credit report. However, short of an employer stating that this is the reason for their decision, that’s pretty hard to prove.

If you believe that a bankruptcy or poor credit was the reason for not being offered a job, you can ask them. If they come out and say that it was, there are options such as filing a complaint with the U.S. Federal Trade Commission, the Equal Employment Opportunity Commission or the New York Attorney General’s Office

When potential employers plan to check your credit, they’re required to get your written commission. However, if you’re just told that they’ll be doing a background check, ask what that involves. If you learn that they’ll be checking your credit report, the best course of action is to be honest. If you have a bankruptcy in your past, explain what prompted the filing and what steps you’ve taken since then to get your financial life back on track. A bankruptcy may actually be preferable to some employers than finding bad credit and a ton of debt.

After filing for bankruptcy, it’s always a good idea to check your credit reports regularly to see exactly what’s showing up there and to make sure that the debt you’ve discharged is no longer showing up. Your bankruptcy attorney can provide advice on how to ensure that your credit reports are accurate after a bankruptcy and how to deal with potential employers as you make a fresh start.

Source:, “Past Bankruptcy Can Haunt Your Job Hunt,” Dona DeZube, accessed Oct. 13, 2016

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