Can an employer refuse to hire you over a bankruptcy?

People do worry that a bankruptcy won’t look good to others. In some ways, that may be true, but on the whole, it’s understood that bankruptcy is a legal protection offered only when people truly need it.

When you’re looking for a job during your bankruptcy or after you have gone through one, that shouldn’t affect your job search, but the reality is that some employers may see your history and decide not to hire you. That can be upsetting, especially as you’re working to get into a better financial situation.

Why can bankruptcy hurt your job search?

While your finances themselves aren’t anyone’s business, the idea that you went bankrupt is of public record. Your potential employer will likely run a credit check, and your bankruptcy will come up. Employers can legally use a credit report to deny someone a job.

Not all employers look at a person’s credit history, however. For example, if you want to apply to work for a federal, local or state government agency, they won’t look at your credit. Your bankruptcy can’t be considered by those entities. However, if you are applying in the private sector, then the employer has the ability to seek your credit report and to use it when making hiring decisions.

Should you be upfront with your potential employer about your bankruptcy?

If you know that they’ll be looking at the credit report, then being upfront about your bankruptcy and why you went bankrupt could help. However, you aren’t obligated to disclose the reasoning if you don’t want to do so.

It is also possible that a potential employer may see your bankruptcy as a sign of responsibility. If your credit is already damaged because of late payments, tons of debt and unpaid bills, bankruptcy is a method of cleaning all of that up.

People run into financial problems for all kinds of reasons, and bankruptcy isn’t uncommon. Can it affect your job search? Yes — but it’s also possible that it will help you move past your current situation.

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