John Doe

If you want to make your dreams come true, the first thing you have to do is wake up.

Mary Taylor

You can have anything you want if you are willing to give up everything you have.

Bankruptcy 101: What Happens When You Declare Bankruptcy?

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When faced with the prospect of having to file bankruptcy, most individuals have their financial turmoil front and foremost in their mind. How bankruptcy could affect one’s current job or future employment opportunities may not be something that is immediately considered. In most cases, if you’re currently employed bankruptcy and bad credit won’t hurt your employment. The real concern is how bankruptcy and credit problems could affect future employment opportunities (especially in the private job sector). Though the law regarding employment and bankruptcy is clear and seems ‘cut and dry’, the reality of human beings making human decisions is cloudy and rarely ‘cut and dry’. For example, by law, an employer can not refuse to hire you because of a bankruptcy. However, there are no laws in place that require employers to disclose reasons a person wasn’t hired or refused a position of employment. Therefore, it is entirely possible to not hire someone because of a bankruptcy or bad credit issues (as long as the employer does not disclose that those are the reasons for not hiring an individual).

In theory, the areas of employment where bankruptcy most definitely will hinder a prospective employee form employment would be jobs where cash handling and access to financial information records is part of the prospective employee’s duties. For example, it would seem logical for a bank not to hire a person in financial straits because of the direct access to cash and financial information said individual would be privy to. This is not legal, but as mentioned above, the bank is not required to disclose why they didn’t hire an individual. So again in theory, the exclusion of certain applicants based on their financial state of affairs is likely a very common practice among financial institutions. That said, it’s best advised that when notified that a background or credit check is going to be performed, the applicant should be candid about their financial circumstance with their prospective employer before the checks are initiated. In doing so, when the background or credit check reaches the prospective employer and they’re already aware of what’s listed, honesty and openness has been demonstrated by the applicant.

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If you feel that you’ve been wrongly terminated shortly after a bankruptcy or discriminated against in gaining future employment, the burden of proof is on you and legal council should be sought immediately, as you may have a legal case against you former or prospective employer.

Notoriously, the term ‘bankruptcy’ often carries a negative tone, but bankruptcy is more often a good thing rather than a bad thing. Bankruptcy provides huge relief and the opportunity to start over for a multitude of individuals and their families. What many people fail to realize is that situations that lead to bankruptcy cover a large array of varying individual circumstances. Bankruptcy is a good alternative to being sued by a creditor which leads to terrible judgements against an individual that carry over permanently on the individuals public record. These judgments can often mean exacerbating ones financial hardship rather than alleviate their financial woes. Bankruptcy is individually situational and is not inherently ‘bad’ or ‘good’, it’s vital protection for individual consumers facing huge legal trouble because of debt.

Once filed, a bankruptcy case cannot be entirely reversed and remains on credit reports for 7 to 10 years. This is true whether the bankruptcy case has been fully discharged (completed) or the case is not completed. During the actual proceedings of a bankruptcy case, it’s possible to stop or discontinue the proceedings. This comes in the form of a motion to dismiss the bankruptcy proceedings, which an individual or their attorney files a request for a dismissal hearing. When a bankruptcy is dismissed, all debts to creditors return to the previous state and are owed as due. Additionally, protections of the bankruptcy are withdrawn and once again the debtor is subject to legal actions and lawsuits. But as stated above, the fact that you filed will remain a matter of public record and can not be undone. Additionally, a bankruptcy that has been discharged can be revoked within the time period of one year from the date of discharge. This happens on the grounds that fraud or perjury has happened and is discovered and presented to the courts.

If you are wondering if bankruptcy is right for your financial situation, there are numerous online bankruptcy resources that you can research. Oftentimes, just having the correct information can mean the difference between losing it all and coming out on top.