Filing for bankruptcy can bring induce any number of unforeseen worries for individuals struggling to handle their debt. However, a bankruptcy filing is not a detrimental move for your financial or professional future.
For an individual in Virginia who already holds a job in either public or private industry, employers cannot terminate an employee solely based on a bankruptcy filing. Federal law protects employees from termination and other forms of discrimination based on a bankruptcy filing.
Employers additionally can’t cite a bankruptcy as a reason for altering someone’s employment such as demoting, reducing payment, denying a promotion or reducing a person’s responsibilities. Governmental employers face further restrictions as they also can’t justify denying employment to a person because of a previous bankruptcy filing.
Potential benefits of bankruptcy
The financial benefits of bankruptcy are numerous, from getting relief from debt collectors to finding relief from burdensome debt. In addition, filing for bankruptcy could potentially help with a job search rather than hinder one.
One major benefit of bankruptcy is that the process allows for recovery of a damaged credit report. Although a bankruptcy filing does stay on a report for seven to 10 years after completion, reporting debts as “in bankruptcy” may appear in a better light to hiring managers than delinquent accounts and a poor credit score.
Employers frequently run a credit check as part of screening for job candidates. Each employer may see a financial record differently, but many tend to see low scores, unpaid bills and overall poor credit as a red flag when hiring.
Keep moving forward
Bankruptcy shows an individual is working to improve their financial situation and moving toward a healthier, more stable future. This development can signal to employers that a person is a solid choice for a new career move. Your financial and professional future don’t have to derail after a bankruptcy filing. On the contrary, managing your debt and getting a handle on your financial position can prove a positive indicator for employers.
If you’re worried about how bankruptcy could affect your career or think your employer mistreated you due to a bankruptcy filing, consult financial and legal experts for advice throughout this process. Bankruptcy does not mark the end of a career and your future is worth the time and commitment to ensure fair treatment during and after a bankruptcy.