The Federal Employee – Bankruptcy And Employment

For anyone with debt problems, including a federal employee, bankruptcy is a viable option to get back on track financially. Often the debt crisis is caused by an event for which you have little or no control over, such as an extended illness, a death in the family, or a divorce. Still, you may be wondering how filing for bankruptcy might affect your job. For example, could your salary be impacted if your manager or supervisor learns that you filed for bankruptcy? What about your government security clearance? How does bankruptcy affect applying for a job? Let’s find out.

Get out of debt. Speak with a Baltimore bankruptcy attorney about the best options for you. Contact Sirody & Associates for a free consultation.

They Can’t Fire You Due To Bankruptcy

It is illegal for any employer – government or otherwise – to fire you because you filed for bankruptcy. In fact, you are not obligated to inform your employer about your bankruptcy, although they may still find out (more on this later).
Also, no employer may decrease your salary, demote you, or take away privileges due to your bankruptcy. Remember though, filing for bankruptcy does not protect you from sanctions due to poor on-the-job performance. If you frequently arrive late or engage in dishonest behavior, your employer may have grounds for firing you independent of bankruptcy.

What About Security Clearance?

Both government and private sector jobs sometimes require security clearances. In most cases, if you file for bankruptcy, you won’t lose clearance. However, for some employees with very high clearance, it could become an issue. The best thing to do is to speak with your company’s human resources staff, and inquire about department policy regarding security clearance.

Do I Have To Tell My Employer About My Bankruptcy?

You are not required to inform your employer about bankruptcy. But, if you have been sued by a creditor and your wages have been garnished, your employer will know that you have a credit situation. Additionally, if you file for Chapter 13 bankruptcy, the court may order that payments be automatically deducted from your wages. In this case, your employer will find out about your bankruptcy.

Bankruptcy And Applying For A Job

If you are applying for a job, no government employer may discriminate against you due to a past or current bankruptcy filing. In the private sector, however, some employers will ask for a credit check when deciding about hiring. Any potential employer, however, must have your permission to check your credit.

Ask Your Attorney

If you need to file for bankruptcy, it’s smart to get trusted legal counsel. They can give you sound advice on how to handle your bankruptcy and employment. For example, when, and if, you should inform your employee about your bankruptcy. Also, an experienced lawyer can make sure your rights as an employee are protected throughout the bankruptcy proceedings.
If you are in a debt crisis, don’t be afraid to reach out. Bankruptcy is an organized, legal process that allows you to get a fresh financial start.
Speak with a Baltimore bankruptcy attorney with many years of experience. Contact Sirody & Associates for a free consultation.