Does a Bankruptcy Keep Me From Working for a Bank?

For many whose debts are too much and too deep to pay, bankruptcy is a viable option to getting started back on the path to a clean credit history. However, filing for bankruptcy has its drawbacks, one of which can affect your employability. Seeking employment at financial institutions, such as banks, can be challenging and, in some cases, tougher because bankrupt individuals must work with money, creating the perception of high risk by these institutions.

The Answer

If you file bankruptcy, you are not automatically precluded from working for a bank. On its website Bankruptcy-home.com, Dallas-based attorneys Fears and Nachawati state that under federal law, debtors are given the same employment protection as those of a certain race, gender or religion.

Federal Law

Section 525b of the U.S. bankruptcy code states that "private employers may not discriminate with respect to employment against an individual who is or has been a debtor under the Code," according to Bankruptcy-home.com. Thus, any individual who has filed bankruptcy in the past or who is currently under bankruptcy status is eligible for employment in any industry, even banks.

In Spite Of

Though federal law prohibits discrimination against those who file bankruptcy in employment matters, the reality is that many financial institutions, such as banks, may shy away from hiring those with a poor credit history, particularly when considering an equal candidate without financial or credit troubles. In recent years, the increase in the number of employers adding credit checks to the list of "screening tests" has added to the ability of financial institutions, such as banks, to bypass those with steep financial issues, such as bankruptcy.

Penalties

The U.S. Equal Opportunity Employment Commission includes matters of hiring, termination, remuneration and promotion in its list of items that are prohibited from discrimination. The commission protects against any discrimination related to age, sex, gender, religion and debt status. Employers, such as banks, that are found guilty of discrimination may be forced to pay back pay, hire and provide promotions to victims of discrimination. Additionally, they may have to pay attorney's fees or court costs. In cases of intentional discrimination, compensatory and punitive damages may be awarded.