Can a Prior Bankruptcy Hurt You in a Promotion?
Bankruptcy allows consumers who are completely overwhelmed by debt to discharge their obligations and start over. Bankruptcy is not a "get-out-of-debt-free" card, however; it remains on your credit report for seven to 10 years and can hurt your ability to get an apartment or a loan. It is illegal for employers to fire, refuse to hire or refuse to promote debtors solely because of bankruptcy, but employers may consider bankruptcy among other factors if good credit is relevant to the promotion.
Other People Are Reading
-
Anti-discrimination Law
-
It is against the law for an employer to refuse to hire an employee or to fire her merely because she has a bankruptcy on her credit. Thus, employers cannot, as a general rule, refuse to promote an otherwise-qualified employee simply because she filed for bankruptcy. However, if the promotion requires the employee handle large sums of money or otherwise requires proof of integrity, the employer has the right to deny the employee the promotion.
Length of Time
-
Bankruptcies stay on your credit history for seven to 10 years, depending on the type of bankruptcy you file. Chapter 13 bankruptcies stay on your credit for seven years and Chapter 7 bankruptcies stay on your credit for 10 years. Thus, an employer could potentially deny you a promotion if you had a bankruptcy several years ago. However, this is is unlikely if you have rebuilt your credit since, as your employer would have to look at your entire credit history and not just your past bankruptcy.
-
Written Permission
-
Employees must consent in writing before an employer can check their credit. However, if a promotion requires a high credit score, the employee will not be able to gain the promotion if he does not give his consent for the employer to run the credit check. However, the anti-discrimination law still applies once the employer runs the credit check.
Considerations
-
Although employers cannot discriminate against employees solely because of bankruptcy, they have the right to consider credit along with other factors when making promotion decisions. Thus, if you are concerned about the effect a bankruptcy may have on potential promotions at work, make sure that your work record is otherwise spotless; if you are late, disorganized, or otherwise engage in behaviors that might make you lesser qualified for a promotion, your employer can justify not giving it to you after discovering your bankruptcy.
-
