Will Filing for Bankruptcy Affect My Job Search? What You Need To Know About Unemployment and Bankruptcy

If you have recently declared chapter 7 or chapter 13 bankruptcy, you may be concerned as to how it will affect other aspects of your life. For example, will you lose your job because you have filed for bankruptcy, or will you struggle to find a job because you have declared bankruptcy?

If you are concerned about your employment opportunities once you file for bankruptcy, make sure you contact a bankruptcy attorney. They will be able to discuss and decide the best route for you to take in regards to your finances and will advise you on how bankruptcy may affect your employment opportunities. 

How bankruptcy will affect your current job

If you are considering filing for bankruptcy, you may be worried that it might affect your current job (which may be your only steady source of income). However, in the USA, no company (government or private) is legally allowed to fire you solely because you filed for bankruptcy. They are also not allowed to demote you, reduce your salary, or take away your responsibilities. 

However, filing for bankruptcy may cause a huge amount of distress. If this has been directly affecting your work (e.g. you have been showing up to work late, not focussing or dishonesty), your boss will have justified reason to fire you. Therefore, you must try and look after your mental health while you are going through the process of bankruptcy. 

How bankruptcy will affect your job search

If you are currently looking for a job, the prospect of bankruptcy may be even more daunting. 

Potential employers may consider your financial circumstances when deciding whether to offer you a job. This is especially true if the position you seek requires you to handle money. Luckily, most employers perceive a job applicant filing for bankruptcy as a definite action to improving their challenging economic situation. Bankruptcy means you have taken action to remedy your financial situation. If you have filed for a chapter 7 bankruptcy, it will be kept on your credit report for 10 years. If you have filed for chapter 13 bankruptcy, it will be kept on your credit record for 7 years. 

The best thing you can do is be honest about your bankruptcy to your potential employer. Unless your potential job requires a high level of security clearance, licensure, or you will be given an employer-issued credit card, your bankruptcy may have an impact on your job hunt. 

Although filing for bankruptcy does not come without its challenges, it is not justifiable to fire/refuse to hire someone because they have filed for bankruptcy.

Nevertheless, if you are applying for roles in the government (for example: federal, state, or local government roles), no agency is allowed to consider your bankruptcy when deciding whether or not to hire you, so this is something you should consider while you are on the job hunt and have recently filed for bankruptcy. 


If you are considering, or have recently filed, for bankruptcy, you may be confused about how it will affect your job hunt. If you are still confused, make sure you contact a professional bankruptcy lawyer for professional and confidential advice.