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Will I not be able to get a job after bankruptcy?

New Orleans, LA |

I filed for bankruptcy last year, and just recently found out that my company has been bought out, and found out that nearly everyone, including me, is not going to be retained. How much more difficult will the job hunt process be with a bankruptcy on my credit report? Are there any tips for working around this?

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Attorney answers 3


Well you have asked the $64.00 question. There is no good answer and there is very little one can do about. Why companies have started relying on credit reports concerning hiring makes little sense to me. If anything is going to work it is probably be up front about the filing and explain the circumstances that lead to the filing. If there was good reason that the recruiter can take his boss maybe they will overlook it. Not all companies use credit reports, but it has become popular.


Section 525 of the bankruptcy code specifically states that employers will not discriminate against you because of the bankruptcy. While we all know this would be hard to prove, most employers do not really care. Especially now in this economy where so many have been hit by circumstances beyond their control.


While the above attorney answers are concise and fairly clear they don't tell the whole picture. There presently a split of authority in the Circuit Courts (appeals courts) around the nation. The issue is whether a future employer can discriminate against you for filing a bankruptcy. Some circuits say yes, and some say no. It is illegal for a present employer to discriminate against you for filing bankruptcy. This issue is likely to go to the Supreme Court and who knows what they will do. The section of the bankruptcy code that applies here was written at different times so some courts think the meaning or law is different. From my experience however, most employers care more about bad debt and doing nothing versus a potentially qualified applicant that filed bankruptcy. If they do not hire you they likely will not give you any actionable reason for not choosing you so it is hard to prove that it was for filing bankruptcy or some other actionable reason.

The response given is not intended to create, nor does it create an ongoing duty to respond to questions. The response does not form an attorney-client relationship, nor is it intended to be anything other than the educated opinion of the author. It should not be relied upon as legal advice. The response given is based upon the limited facts provided by the person asking the question. To the extent additional or different facts exist, the response might possibly change. Attorney is licensed to practice law only in the State of Illinois. Responses are answers to general legal questions and the receiver of such question should consult a local attorney for specific answers to questions.

Daniel A. Stone

Daniel A. Stone


I agree with the above comments. Employers do not want to be sued in bankruptcy court. It will cost them 10k to defend. The practical issue is that employers to include the government want to make sure that an employee or potential employee has an action plan with their debts. A bankruptcy counts as an action plan.

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