Now that our economy is well on its way to recovery, many of those who were unemployed through the recession are now able to find employment opportunities in our areas of service in Riverside and Orange County. So, how do you deal with a bankruptcy while you are employed? Does your employer need to know? Will they find out? Will your employer fire you if they find out about a bankruptcy filing? We will attempt to address these issues in this article.
What is the best way to find out if your employment will be impacted by a bankruptcy? The only people that can answer that question for you is your employer themselves. You can address the issue with your Human Resources Manager at your employer. Before you file for bankruptcy, ask your Human Resources Manager directly if a bankruptcy filing will affect your employment or not. There are no rules by state or federal law that say you have to disclose a bankruptcy, but, if you are concerned about the impact, you should ask your Human Resources Manager how this can affect your current opportunity in case your employer finds out about your bankruptcy for one reason or another. If you ask them about the impact of bankruptcy before your petition is filed, then you will be bringing a hypothetical situation to your employer without yet taking the action. If you find that the impact on your employment is more severe than you can handle, you may want to consider other options outside of bankruptcy such as debt settlement.
If your employer is not on your bankruptcy petition, they will not receive a notice of filing, but that does not mean that there is no way for them to find out about your bankruptcy filing. If the employer consistently monitors employee credit records, they may see the bankruptcy on your credit report after it has been filed. We have found that some companies which are focused in the financial industry where employees handle sensitive financial information, may want to keep an updated file of their employee credit records, but most employers won’t run your credit consistently after you have been hired. Once again, we find it very rare that a bankruptcy will impact an employment opportunity when you are already employed. It is up to you to take the precaution. No law office can keep track of all employees and how they treat bankruptcy situations across the board because companies have various policies and those policies are always changing.
Many of those who are interested in bankruptcy want to know how the income affects a bankruptcy. Can you still file for bankruptcy even though your income is back to normal? Yes, it is still possible to qualify for bankruptcy even though your income is back to normal because there are multiple ways to qualify for a Chapter 7 bankruptcy. The most common way to qualify is by median income level. You can qualify for bankruptcy by an average income number over the last 6 months. So, if you have only been working one month and you were unemployed for 5 months before that, you would average your income over the last 6 months which should still be low and able to qualify for bankruptcy. The next most common way to qualify for Chapter 7 bankruptcy is by proving that your expenses are above your income which is also referred to as a “means test”. If you do not have the means to cover your expenses, no matter what your income is, you may still be able to qualify for bankruptcy.
There is one additional way to qualify for bankruptcy in Chapter 7 even though your income is high. If your debt consists of mostly business debt, you may qualify for a “Non-Consumer Debt Chapter 7″ meaning that the majority of your debt is business related. In this situation, you can qualify for bankruptcy regardless of employment or income numbers.
If you are interested in finding out more information on any of the items discussed above, please feel free to contact us at (855) 257-7671 to ask questions or set up a consultation. Bankruptcy Law Professionals has bankruptcy attorneys available in the Riverside (Inland Empire) region or in Orange County. We look forward to hearing from you.