Will my employer find out if I file bankruptcy?

Full question:

Will my employer find out if I file bankruptcy?

Category: Bankruptcy
Date: 04/07/2025
State: National

Answer:

Bankruptcy petitions are public records. However, under normal circumstances, unless your employer is a creditor, he or she will not know you filed a bankruptcy petition. If your employer is a creditor, he or she must be listed as a creditor on the schedules and receive notice of the bankruptcy proceeding. Also, in some states chapter 13 debtors are required to make payments through wage garnishment and their employer will thus learn about the bankruptcy when ordered to withhold and remit payments to the trustee.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

Does filing for bankruptcy affect getting a job?

Filing for bankruptcy can impact your job prospects, particularly in fields that require financial responsibility or security clearance. Employers may conduct background checks that reveal bankruptcy filings. However, federal law prohibits discrimination based solely on bankruptcy status when hiring. It’s important to be honest if asked about your financial history during the hiring process.

Does your job get notified when you file for bankruptcy?

Typically, your employer will not be notified of your bankruptcy filing unless they are a creditor listed in your bankruptcy schedules. If they are, they will receive notice of the proceedings. Additionally, in Chapter 13 cases, employers may be required to withhold payments from your wages, which would inform them of your bankruptcy.

How do you explain bankruptcy to your employer?

When explaining bankruptcy to your employer, be straightforward and honest. You can mention that it was a necessary step to regain financial stability. Focus on how you are managing your finances moving forward. It’s important to convey that you are committed to your job and that the bankruptcy will not affect your work performance.