How bankruptcy affects your job and career

There is no doubt that bankruptcy can provide much-needed debt relief, particularly if you are overwhelmed with debt problems. However, it is normal that you might be concerned about its potential impact on your job and career. Unless it is a clear violation of the terms of your contract of employment, it would be illegal for your current employer to sack you simply because you have filed for bankruptcy. Your employer could be prosecuted in such a scenario. Prospective employers on the other hand, are a completely different kettle of fish. To begin with, it's pretty standard for financial, gaming and government employers to conduct background checks on potential employees.

In spite of the global recession, there has been a marked increase in organisations that are checking out the credit reports of prospective employees. If you have filed for bankruptcy, these employers may not want to employ you, particularly if they have taken the time to perform such checks. The reason for this is that such employers are of the view that reliability and creditworthiness go hand in hand. They tend to view how you handle things personally as a good sign of how you would handle their company's assets. They may therefore be of the opinion that people who are unable to take responsibility for their financial affairs may end up blaming other people for their own failings and mistakes. Basically, these employers will want to be assured that you will not be a high risk investment if you are hired. So even though there are laws that forbid an employer from discriminating against a prospective employee solely on the basis that the applicant has declared bankruptcy in the past, the possibility exists that the employer may choose to look elsewhere. However, there are also many employers that do not do any such checks, and don't care whether you've filed for bankruptcy in the past.

Now you might be thinking that filing for bankruptcy rules you out of the running for jobs that require background checks. Not necessarily. You should never underestimate or overlook the ability of employers to be sympathetic. They are human after all. If the only negative thing on your credit file is the bankruptcy, then you stand a much better chance than if you have lots of other negative things in your report. Having bad credit is bad, but personal bankruptcy IS a solution. Filing for bankruptcy demonstrates that you identified a problem in your financial life and took steps to rectify it. Bankruptcy hasn't ruined your employability. It has made landing your dream job more difficult, but by no means impossible.

So the question is, what should you do if want to, or you have recently applied for a new job that requires background checks after recently filing for bankruptcy? In the case of jobs where your background will be checked out, be upfront and honest about the circumstances of your bankruptcy and what led to it. Don't' ignore it, and don't make excuses for it or try to lie about it. It's there in black and white. Secondly, you will need to sell yourself harder to convince the employer that they are not taking a high risk by employing you. You can only do this by showing that personal bankruptcy has made you wiser, more responsible, and this time, much more determined to succeed.

Jide Pearce writes for http://www.DebtSolutions-R-us. DebtSolutions-R-Us.com has been created to help people in serious debt get good, honest, impartial advice. For example, learn how to take control of your personal finances.. Visit DebtSolutions-R-us.com for insightful articles on various debt solutions