You may have heard horror stories about people losing job opportunities because they had bad credit. Now you may wonder how it will affect your job search if you file for bankruptcy.
But bankruptcy doesn’t have to be a roadblock to employment.
Bankruptcy is more common than you realize
More than 370,000 people filed for bankruptcy in 2022. Sometimes it is the only option for individuals facing massive debt. While some may think it’s due to excessive use of credit cards, for many people, it’s overwhelming medical expenses. For others, it may be a job loss or divorce.
If you are looking towards the government sector for employment, it’s important to note that bankruptcy can not be counted against you at the federal, state and local levels. However, a job search in the private sector may include a background check, including a credit report. But there are ways to be prepared.
If a potential employer asks about your bankruptcy, it is essential to be honest and transparent about your situation. Explain why you filed for bankruptcy, what steps you have taken since then to improve your financial situation, and how you have learned from this experience.
Additionally, focus on how the experience enabled you to regain control over your finances, learn how to create a budget, and give you a fresh financial start. Adequately addressing questions about your bankruptcy can show potential employers that you are responsible and can learn from mistakes.
Choosing to file for bankruptcy is a difficult decision; if you are considering it, you probably have many questions. Take time to review your options so you can do what’s best for your financial situation.