When debt starts to overwhelm you, you may have some difficult choices to make. You may already have made some changes in your spending by cutting back on items like cable, gym memberships and eating out. Maybe you have even sold your second vehicle or put some valuables for sale online. Perhaps you took a second or third job.

If these steps still leave you drowning in debt, you are likely considering filing for relief through bankruptcy. This is a decision to weigh carefully, especially if you have concerns about how bankruptcy will affect your job. Your first step is to obtain as much reliable information as you can about the process and its ramifications.

Hiring and firing

One important fact that may bring you comfort is that bankruptcy is a right provided in the U.S. Constitution. Because of this, most private employers cannot terminate you simply because you have taken advantage of this constitutional right. If you apply to obtain or renew a professional license, enter into a franchise, or request a job permit, the agencies involved may not refuse your request based on a bankruptcy. Your boss cannot discipline you in any way because of your bankruptcy.

On the other hand, your history managing your finances may be just reason for your employer to take action against you, especially if your job requires you to manage other people’s money. Repossessions, foreclosures or other negative actions in the recent past may make you a risk in some industries. While a bankruptcy may not be a lawful reason to fire you, an employer may make such a decision based on your overall credit rating.

While government agencies cannot consider your bankruptcy when making hiring decisions, there is no such restriction on private employers. If you are seeking a job in the private sector, a potential employer may ask if you have ever filed for bankruptcy and reject your application if you have.

Pros and cons

Every industry has its own standards. While a bankruptcy on your credit history may not affect your career prospects in one area, it may greatly influence your chances in another. In many cases, such as obtaining a security clearance, investigators will look more deeply than the notation on your credit history to determine if you will be a benefit or risk to their company.

You have many factors to weigh, including the enormous relief you may feel after the discharge of your debts. Before you make your decision, you would benefit from obtaining complete information as it relates to your circumstances by consulting with a California attorney.