If you’re a Kentucky resident considering bankruptcy, it’s only natural to have concerns about how it might impact various aspects of your life. One common concern is the potential effect of bankruptcy on current or future employment.
Current Employment
- Federal Protections: Under federal law, specifically the Bankruptcy Code (11 U.S.C. § 525), employers (both private and governmental) are prohibited from terminating your employment or discriminating against you solely because you filed for bankruptcy or are associated with a bankruptcy proceeding.
- State Protections: Kentucky laws also offer certain protections. While Kentucky largely mirrors the federal stance on bankruptcy and employment, always consult with a local attorney to understand any specific nuances or additional protections in the state.
- Disclosure: While your employer might not find out about your bankruptcy, if there’s no reason for them to check if they were to discover it somehow, they can’t fire or discriminate against you for it. However, if your wages were being garnished before the bankruptcy, your employer will be notified to stop the garnishments once you file.
Future Employment
- Private Employers: Private employers may conduct a background check before hiring, which can reveal a bankruptcy. While they are prohibited from discriminating against you solely based on bankruptcy under federal law, it can still informally influence their decision, especially for positions related to financial responsibilities.
- Government Employers: Federal, state, and local government agencies are generally prohibited from denying employment based on a bankruptcy filing.
- Security Clearances: If you are in a job that requires a security clearance, or if you’re considering one, bankruptcy might be considered in the context of your overall financial situation. However, many people believe that taking responsible steps to resolve debt through bankruptcy can be viewed more favorably than ignoring or mishandling the situation.
Considerations and Tips
- Honesty: If a potential employer asks about past bankruptcies during an interview or on an application, it’s important to be honest. Frame it in a way that shows you’ve learned from past financial challenges and have taken responsible steps to address them.
- Financial Education: Many bankruptcy filers must complete a financial management course as a part of the process. Mentioning this can show potential employers that you’ve taken steps to better manage your finances in the future.
- Seek Legal Advice: If you believe you’ve been discriminated against due to your bankruptcy, consider consulting with an attorney experienced in bankruptcy or employment law.
Understanding Employment Implications After Bankruptcy
While bankruptcy is primarily a financial tool designed to give people a fresh start, it’s understandable to have concerns about its broader implications, including its impact on employment. In Kentucky, as in the rest of the U.S., there are strong protections in place to prevent discrimination based on bankruptcy. If you’re considering bankruptcy and have more specific concerns related to your employment or any other aspects, consulting with a Kentucky bankruptcy attorney can provide clarity and guidance tailored to your situation.
