Applying for a Job After Bankruptcy

The top 3 search queries bringing people to this site over the past month have been directly related to employment after bankruptcy. This is not a recent concern and I have addressed reader questions about it before.

Not surprisingly, it continues to be at the top of many people's minds.

The St. Cloud Times had an article on Sunday (not available on-line) urging people to "Prepare for a Lay Off Now" with a link to their feature, Managing the Meltdown: Age Matters in Retirement Planning. The article is encouraging people to prepare by taking actions to stop frivolous spending, bulk up savings, pay off debt, update their resume and network.

Planning is essential but a perfect storm of sorts is brewing and the best laid plans may go awry. In some cases, people will find themselves applying for employment after a bankruptcy. Bankruptcy is not a bad thing. Bad things happen to good people and bankruptcies are not the end of the world or a career for the average person. Most employers check credit history. Credit history can go directly to financial accountability or be deemed an indicator of responsibility and accountability. An employer can not check a person's credit history without consent. However, without consent, application may not be considered. Nice catch-22!

How does a person address bankruptcy when applying for employment?

I advocate for full disclosure. An unfortunate event disclosed can be of little significance but the same event "discovered" goes to integrity and honesty. Be prepared for a question asking about the details. When asked, answer and do so honestly.  Bankruptcy should only be an issue in cases where there is a nexus between the bankruptcy and the position. Here is a summary of rights under the Fair Credit Reporting Act. 

Don't let the bankruptcy define you or the be the focus of the interview. Be prepared to articulate lessons learned from the experience and then get right back to the business at hand - selling YOU for the job.

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A Banker's Bankruptcy

A reader writes:

I have a similar question as the young lady from 2/1/08, but mine has more twists. I too am considering filing for bankruptcy. I'm considering filing because I have accumulated about 30k in credit card debt due to job loss and due to a 50% decrease in pay. I have now obtained employment, however I am still earning considerably less than I have in the past. I've scaled back in all aspects of my life, but I still think this is going to be the best option for me. I should also let it be known that I am NOT late on anything. In fact I have a 700 credit score!

Now for the question: I work for a bank as a Banker. I'm considering filing bankruptcy on the credit card that I have with my employer. I need to know if I should speak to someone in HR or the credit card department about this. I had this account long before I started working for the company, however the payments are out of control. Additionally, could my employment be affected as well? I don't directly deal with money, however I do work in a banking branch.

I know this is a rather complex one situation, so I appreciate your assistance. Thanks!

Disclaimer: I am not very familiar with bankruptcy laws or rights.

Your rights as a consumer and your responsibilities as an employee are separate and distinct but in your situation, could both come back to you in your workplace. Because bankruptcy laws can be confusing, I recommend you speak with the credit card department. Because you are not handling money, I would not expect a bankruptcy to impact your employment. Because employment guidelines vary from company to company, I encourage you to talk with your HR representative.

Having said that, I see someone who has faced a number of unfortunate circumstances; finds herself in a tough financial situation; and is taking positive, responsible steps to get it all under control. I am afraid I don't have too much else to offer. Readers, anything to fill in the blanks?

Best of luck to you. You are definitely on the right road!