Career ramifications of bankruptcy

[progressive816]

I'm married and have 2 young kids. Lost job due to merger 2 years back. Have accumulated 30k in debt to stay afloat (mortgage, car payment, all utilities, and food). New job not cutting it, so I sold the house and moved in with in-laws. I'm in school full-time now majoring in Economics. Will graduate in 2 1/2 years. I want to file bankruptcy so that I can have a clean start and a new career. Kind of like starting a new life all over again.

So here's my question. Will filing bankruptcy affect my career options post graduation?

[hansky]

I'm married and have 2 young kids. Lost job due to merger 2 years back. Have accumulated 30k in debt to stay afloat (mortgage, car payment, all utilities, and food). New job not cutting it, so I sold the house and moved in with in-laws. I'm in school full-time now majoring in Economics. Will graduate in 2 1/2 years. I want to file bankruptcy so that I can have a clean start and a new career. Kind of like starting a new life all over again.

So here's my question. Will filing bankruptcy affect my career options post graduation?

Yes, potentially for two different reasons. One, employers often check credit reports and do not hire people who have significantly negative credit. This is especially true in jobs where the emloyee will be entrusted with money or property.

Second, while an education is very important and you certainly will want to pursue it someday, based on your post you are essentially CHOOSING to not work to earn an income to pay your debt because the job is "not cutting it." This sets you apart from most people who file because of involuntary unemloyment, medical bills, etc. I hate to sound harsh, but as an employer, if I knew someone made this decision, or I suspected it was probably the case (which may be evident by the timing of filing and school), it would not get to a second interview. I would expect the person to just ditch everything again, to start yet another "new life."

While my opinion is based more on the idea of personal choices, it is also possible that a bankruptcy trustee or the US trustee, or a creditor, would view the case as filed in bad faith.

Work a couple years, get on solid footing, then go to school. You SHOULD feel much better about it in a couple years and that will get you the new life.

[Spartan]

What do you plan on doing with a degree in Economics?

If you are going to pursue an academic career, then I don't think BK will matter. They don't care about such matter. They care about your academic performance.

If you want to work at Wall Street, that will be tough. All the major firms check your CR. But if you are really good at what you do, ie, you have established your credential in the academic world, then Wall Street will open their arms for ya. If you can make them money, they love ya! If you are just a rookie looking for new openning, then you are nothing to them.

So, if research is your calling, and you can make breakthrough in economics, there is a future for you there.

People change careers and make it big quite often. SO, if you have what it takes and really have the heart for it, then give it your best shot. You only live once. Whatever you want to do in life, go for it. You don't get a second shot at it.

But if you are only sticking a finger in the wind to see if you 'like it' or not, oh well.... best of luck then. To be successful in economics, is very very very hard.

[lrprn]

.

Yes, potentially for two different reasons. One, employers often check credit reports and do not hire people who have significantly negative credit. This is especially true in jobs where the emloyee will be entrusted with money or property.

This is true. It's against the law for a dompany to not hire you solely because you filed unless they specifically list that you cannot have filed bankruptcy as a job requirement. Unfortunately it's very easy to make up another pausible (and legal) reason to not hire you, even if it's really your bankruptcy that is the no-hire reason. Do some preliminary job searches - luckily economics jobs aren't as closely aligned with handling money directly as accounting or finance jobs are, so the impact of having a bankruptcy on your credit record may be less.

Second, while an education is very important and you certainly will want to pursue it someday, based on your post you are essentially CHOOSING to not work to earn an income to pay your debt because the job is "not cutting it." This sets you apart from most people who file because of involuntary unemloyment, medical bills, etc. I hate to sound harsh, but as an employer, if I knew someone made this decision, or I suspected it was probably the case (which may be evident by the timing of filing and school), it would not get to a second interview. I would expect the person to just ditch everything again, to start yet another "new life."

Luckily not all employers are as judgmental about bankruptcy filers, especially if the person is genuinely trying to find a good fit for a long and productive working life. Not everyone finds their passion in job #1, #2, or even #3.

While my opinion is based more on the idea of personal choices, it is also possible that a bankruptcy trustee or the US trustee, or a creditor, would view the case as filed in bad faith.

I'm not a lawyer, but after reading for many hours over the last year about what qualifies as bankruptcy fraud in order to help our members here better, I believe the chances of that happening are very small. Trustees and courts don't care how you ended up in bankruptcy unless it's obvious that true fraud was involved (hiding assets, filing false forms, 'bustouts' (file to cover up fraudulent credit card/loan use), etc. It's highly doubtful that after being forcibly laid off, then deciding to return to school full-time while living with in-laws to improve long-term income and find a better job fit will be perceived as fraud.

Work a couple years, get on solid footing, then go to school. You SHOULD feel much better about it in a couple years and that will get you the new life.

Sounds like progressive has already done what he/she could to get his/her living expenses as low as possible while going to school. Also the older a person gets, the harder it can be to break into in a new field. If he/she can swing school now, still take care of family, and at the same time improve their long-term finances in return for a few years in school, then I say go for it! Good luck to you, progressive!

[hansky]

.
This is true. It's against the law for a dompany to not hire you solely because you filed unless they specifically list that you cannot have filed bankruptcy as a job requirement.

No, there is no such law that is generally interpreted to mean that (saving wiggle room if a state has enacted such a rare law, or if some court somewhere has somehow interpreted a law to mean that). I am certainly open to finding such a law.

I'm not a lawyer, but after reading for many hours over the last year about what qualifies as bankruptcy fraud in order to help our members here better, I believe the chances of that happening are very small. Trustees and courts don't care how you ended up in bankruptcy unless it's obvious that true fraud was involved (hiding assets, filing false forms, 'bustouts' (file to cover up fraudulent credit card/loan use), etc. It's highly doubtful that after being forcibly laid off, then deciding to return to school full-time while living with in-laws to improve long-term income and find a better job fit will be perceived as fraud.

I don't believe the issue of bankruptcy fraud was raised.

Sounds like progressive has already done what he/she could to get his/her living expenses as low as possible while going to school.

Yes, the poster has made the choice to not work, unlike most people who file because of things beyond their control. Bankruptcy out of necessity is one thing, even if was caused by stupid choices in the past. Bankruptcy just to ditch debt to start a "new life," when one can simply WORK to pay the debt, is quite another. It is a basic issue of character, and people who just ditch things will do it over and over in life. I could decide I don't like my career and just give it up, ditch my debt in BR, and go back to school for a PhD in whatever, on the backs of my creditors. That would make me a poster child for the people who think all debtors are deadbeats - and that is what I would be.

One of the things employers look for, and something that will always come through eventually (in what one does, and in what one encourages others to do).

[lrprn]

No, there is no such law that is generally interpreted to mean that (saving wiggle room if a state has enacted such a rare law, or if some court somewhere has somehow interpreted a law to mean that).

Discriminating with respect to hiring; or
*Denying, revoking, suspending, or declining to renew a license, franchise, or similar privilege.

A private employer may not discriminate with respect to employment (hiring, promotion, unequal treatment, termination, etc.) if the discrimination is based solely on the bankruptcy filing."

If you would like to read this section of the US Code and its history for yourself, go to http://uscode.law.cornell.edu/uscode...000-notes.html

Hope this helps clarify, and I hope you keep posting, hansky. Always good to have differences of opinion here on the boards - adds a richness to our discussions!

[hansky]

Discriminating with respect to hiring; or
*Denying, revoking, suspending, or declining to renew a license, franchise, or similar privilege.

A private employer may not discriminate with respect to employment (hiring, promotion, unequal treatment, termination, etc.) if the discrimination is based solely on the bankruptcy filing."

If you would like to read this section of the US Code and its history for yourself, go to http://uscode.law.cornell.edu/uscode...000-notes.html

Hope this helps clarify.

I have read the law (which, for the benefit of others is NOT what is quoted above). Many times. I have also read the cases interpreting the law, the consensus of which conclude that the language of the statute distinguishes between the government and private employers. They rely on the basic rule of statutory construction that provides that if Congress wanted to place something in a statute, they would have done so. Further evidence of an intentional omission is where Congress includes a similar element in another part of the statute. Congress chose to not add the provision about hiring to private employers, and the majority of courts have held they meant just that. Moreover, the phrase "with respect to emloyment," is interpreted to mean what is says - employment - that requires an emloyment relationship. Had they mean prospective employment, they would have said so. Moreover, it is assumed that each section is given meaning, and to read the section on private emloyers to cover hiring decisions would render it redundant with the section on government emloyers.

Again wiggle room for a court somewhere in the 94 districts concluding otherwise. Obviously, I negligently omitted the provision about government employers.

[progressive816]

Second, while an education is very important and you certainly will want to pursue it someday, based on your post you are essentially CHOOSING to not work to earn an income to pay your debt because the job is "not cutting it." This sets you apart from most people who file because of involuntary unemloyment, medical bills, etc. I hate to sound harsh, but as an employer, if I knew someone made this decision, or I suspected it was probably the case (which may be evident by the timing of filing and school), it would not get to a second interview. I would expect the person to just ditch everything again, to start yet another "new life."

While my opinion is based more on the idea of personal choices, it is also possible that a bankruptcy trustee or the US trustee, or a creditor, would view the case as filed in bad faith.

Work a couple years, get on solid footing, then go to school. You SHOULD feel much better about it in a couple years and that will get you the new life.

Even while working post layoff, I was still unable to pay my creditors. Example: work 40hrs at 11/hr with take home of $300 per week.
-deduct gas expense of $60/wk for going to work and dropping off kids.
-deduct $175 child care

That leaves me with $65/wk on a 40hour work week.
My wife makes the same amount but pays for:
-car $325/month
-health ins. $260/month
-auto ins. $110/month
-phone $80/month
-electricity $200month
-rent $600month
-diapers,formula, etc.$100/month
Leaving her with $231.66/month or $53.46/wk.

How can we take care of creditors if we can barely take care of our family first? I thought deeply about the situation before considering BK. My biggest concern is employment discrimination despite the law in place. At the same time, I need a fresh start so I can better provide for my family in the long run. You have to understand one thing, It isn't like I woke up one day and decided "hey I'm not going to work anymore." What has been happening is I'm not able to pay my creditors even while working. I hope this kind of helps explain my situation.

[Spartan]

I have read the law (which, for the benefit of others is NOT what is quoted above). Many times. I have also read the cases interpreting the law, the consensus of which conclude that the language of the statute distinguishes between the government and private employers. They rely on the basic rule of statutory construction that provides that if Congress wanted to place something in a statute, they would have done so. Further evidence of an intentional omission is where Congress includes a similar element in another part of the statute. Congress chose to not add the provision about hiring to private employers, and the majority of courts have held they meant just that. Moreover, the phrase "with respect to emloyment," is interpreted to mean what is says - employment - that requires an emloyment relationship. Had they mean prospective employment, they would have said so. Moreover, it is assumed that each section is given meaning, and to read the section on private emloyers to cover hiring decisions would render it redundant with the section on government emloyers.

Again wiggle room for a court somewhere in the 94 districts concluding otherwise. Obviously, I negligently omitted the provision about government employers.

Is there any ruling that confirms your read of the statutes or you are just sounding off what you think how things ought to be?

[HHM]

Actually subparagraph (b) of Section 525 specifically addresses Private employers.

(b) No private employer may terminate the employment of, or discriminate with respect to employment against, an individual who is or has been a debtor under this title, a debtor or bankrupt under the Bankruptcy Act, or an individual associated with such debtor or bankrupt, solely because such debtor or bankrupt—
(1) is or has been a debtor under this title or a debtor or bankrupt under the Bankruptcy Act;
(2) has been insolvent before the commencement of a case under this title or during the case but before the grant or denial of a discharge; or
(3) has not paid a debt that is dischargeable in a case under this title or that was discharged under the Bankruptcy Act.

There may be some disagreement about how far this particular clause applies to "hirng". But, there is an arguable claim that the clause regarding "discriminate with respect to employment against" relates to hiring, and it has been applied to the "hiring" shpere of employment. However, as a practical matter, it is difficult to prove this type of discrimination as a potential plaintiff must prove that the Bankruptcy was the "sole" reason for denial of employment. So, even though there is a legal protection, the practical effect is nil.

The reality is, many people on this forum who were worried about getting jobs, got jobs just fine. For most jobs, bankruptcy is not a factor and depending on the job, if a past bankruptcy in no way relates to the job duties, and the employer denies employment based on a credit check, you still have a general employment discrimination claim.

[Grace]

You can file discrimination law suits if you want, but that won't put you among the popular candidates for future jobs. And unless you live in a huge metropolitan area, word will get around fast that you sued a potential employer. People don't get independently wealthy from employment discrimination law suits when all you've got in your background is a bankruptcy. You have to work somewhere. Tread carefully and think long-term.

[GoingDown]

With the way inflation is increasing-- especially for essential things like housing and gasoline -- there will be so many people filing for bankruptcy in the near future that employers would have a very small pool of acceptable applicants if they made their hiring decisions based upon whether or not someone has filed BK.

Besides, if the prospective employer is that worried about an applicant with a bankruptcy in their past, then chances are they wouldn't want to see any late payments or charge-offs on their credit reports, either. So in that case, someone who needs to file BK is probably SOL with that particular employer anyways.

Personally speaking, I wouldn't want my job to be dependent upon what my credit report says about me. I would look for a job in an area of employment that did not check a person's credit before hiring them.

[progressive816]

was it a concern for any of you guys?

Has anyone here sought employment post BK? If so, can you share with me your experience?

[SinkingFast]

Here's one. A job where the candidate may typically have problems with a BK in their background:

http://www.bankruptcyforum.com/showt...ighlight=sales