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Learn the Effects of Personal Bankruptcy on Employment

Personal Bankruptcy

There may be various different reasons why an individual cannot make ends meet. The most common reasons that people experience a financial crisis and take part in declaring bankruptcy is because they were fired from their job, let go because of cuts, or were unable to find employment.

Bankruptcy and employment often create a vicious cycle. The individuals who are most in need of employment are the people who are experiencing severe financial debt and the individuals who have declared bankruptcy. However, declaring bankruptcy may have a very detrimental effect on an individual's ability to find and obtain employment.

This creates various complications because the inability to pay debts is what has caused an individual to file for bankruptcy, and employment may be the only effective way to pay debts. If an individual cannot obtain and maintain a steady income, then it will be natural for them to suffer from financial hardships again in the future.

There are many adverse effects to declaring bankruptcy. One of the most harmful consequences is the increased difficulty that an individual will face while trying to obtain a job. Obviously, then, an individual who is considering declaring bankruptcy should consider the effects that it will have on his or her ability to find a job.

Many companies and organizations perform background checks and review credit reports. In addition, an individual declaring bankruptcy will usually not be permitted to obtain a security clearance, which may prevent him/her from working in a government position.

To boot, if a government employee has a security clearance at the time that he or she files for bankruptcy, then the clearance may be revoked. Though they cannot be fired, an individual may experience problems at work as a result of declaring bankruptcy and employment advances may be refused.

Someone who has gone bankrupt may be denied promotions or position reassignment. If they work in a position in which they must handle money or company finances, they may be transferred to a different position within the company.

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