2020 Best Invention

Can I Get a Job, Housing, and Benefits if I File For Chapter 7 Bankruptcy?

Upsolve is a nonprofit tool that helps you file bankruptcy for free. Think TurboTax for bankruptcy. Get free education, customer support, and community. Featured in Forbes 4x and funded by institutions like Harvard University so we'll never ask you for a credit card. Explore our free tool

In a Nutshell

Many people feel that the consequences of bankruptcy will extend to their life, work and income. However, the vast majority will keep their day-to-day lives intact without issue.

Written by Attorney Jonathan Petts
Updated August 11, 2020

Those seeking bankruptcy may feel intimidated by the effects it could have on their life, work, and income. However, the vast majority of those who file will see little to no difference on their day to day lives - aside from more financial freedom and the chance for a fresh start.

Bankruptcy and my job(s)

Can You Be Denied A Job After Filing For Bankruptcy?

One of the biggest fears individuals have about filing for bankruptcy is how it will affect their current or future job. However, it's highly unlikely that filing for bankruptcy will affect your ability to secure - or keep - a job.

If you already have a job. If you already have a job, your employer is not allowed to fire you due to a bankruptcy filing. No matter what, you cannot lose your job because of bankruptcy. This includes reducing your salary, demoting you, or taking away responsibilities. If your employer does attempt to do any of these things because of your bankruptcy, you are entitled to take legal action against them.

If you’re looking for a job. Because bankruptcy appears on your credit report, potential employers will likely find out about your filing if they run a background check. Since you have to give consent to do a background check, you’ll at least have an idea if it might come up.

Federal, state and government employers. Federal, state, and local government entities are not allowed to deny you a job because of bankruptcy. The only way a bankruptcy filing can affect your employment is through private employers.

Private employers. If a private employer denies you a job opportunity because of bankruptcy, they must provide a reason -- aka “just cause” -- for why they decided not to hire you. For example, if you were applying for a job that involved managing money, the employer could make the case that your bankruptcy gives them just cause to deny you the position.

Only a small portion of those who file for bankruptcy will experience any difficulty applying for a job after bankruptcy, and even those who do are more likely to be accepted than not. You are unlikely to be denied a job because of bankruptcy, and can’t lose a job because of bankruptcy, either.

How Do Employers Find Out About Bankruptcy

It's pretty rare for your current employers to find out about a Chapter 7 bankruptcy filing, though it can happen. The three ways it usually happens are:

You told them. Depending on your job and your relationship with your employer, you may choose to tell them of your Chapter 7 bankruptcy filing yourself. It’s important to remember that you are not required to disclose this information to your current or future employer unless you choose to.

You owe them money. In the rare event that you owe your employer money, typically for a payroll overpayment, they will be notified of your bankruptcy filing just like the rest of your creditors. This does not change the fact that you cannot lose your job because of bankruptcy.

You have another creditor garnishing your paycheck. Your employer could also find out about your bankruptcy if you currently have a wage garnishment. You or your attorney will have to inform them of your bankruptcy in order to pause the wage garnishment.

Upsolve User Experiences

730+ Members Online
Anita Thompson
Anita Thompson
★★★★★ 9 days ago
Upsolve was my answer to filing Chapter 7 bankruptcy. I couldn't afford an attorney and I was able to fill out the forms on my smartphone. It was explained in an easy-to-use format for the everyday lay person. This software is free to use and has YouTube videos as well. I highly recommend using Upsolve if you cannot afford an attorney.
Read more Google reviews ⇾
★★★★★ 10 days ago
I just had my 341 Meeting on May 5th at 10:30 am. The trustee first asked me to be sworn in by standing and raising my right hand. It was a little weird getting out my car, standing and raising my hand because I had to work that day, but I did so. I had to confirm my name for the record and have I read the bankruptcy information sheet; did I my petitions, and am I the one that signed then. Then the yes or no questions started exactly like the Upsolve 341 Meeting video. Have I filed bankruptcy before; my marital status; length of time since my divorce; do I owe alimony or child support; am I renting; place of employment; do I own a car; how much did I pay for it; have I ever owned real estate; view and verify the information on my tax form; have I listed all creditors. The trustee then said that he needed no further information, and there is nothing more I need to do and this concludes the meeting and I can hang up and finally breathed. The meeting lasted about 15 to 20 minutes! Now I’m waiting for the 60 days to be over, and pray that there truly is nothing more for me to do. Thank you so much Upsolve for being there for me, and for the chest compressions when the stress seemed a little too much at times. Your platform has truly been a blessing. I couldn’t have done this on my own. My prayers to everyone! Remember to breathe. One final thing. The questions that are asked by the trustee are not verbatim. They are similar. Just listen carefully and answer.
Read more Google reviews ⇾
Franky Gonzalez
Franky Gonzalez
★★★★★ 11 days ago
I was kinda scared at first to use with recommendation from local pro bono legal service told me use this service to file. I took me a few months to finally file. finally did it and what a huge relief. the community in general is very helpful.
Read more Google reviews ⇾

Bankruptcy and My Housing

Can You Be Denied Housing Because Of Bankruptcy?

Another common concern individuals have is how a bankruptcy filing will affect their current and future housing situations. While there are certain things that landlords are not allowed to take into consideration when granting or denying someone housing - like race, religion, mental condition, income, or sex - they are allowed a great deal of discretion when it comes to your credit history. This includes being allowed to deny an individual housing because of bankruptcy. This means that when it comes to applying for housing after bankruptcy, it often depends on the landlord.

Landlords have several resources at their disposal for screening potential tenants. Not only can they perform a credit check on you, but there are also services dedicated to providing landlords with background information when you apply for housing.

The best thing to do? Be honest. Since your landlord is going to learn about your bankruptcy filing no matter what, it is likely in your best interest to have an initial conversation with them at the beginning of your filing process. This is not only a show of good faith but also gives you a chance to explain your situation and the steps you are taking to improve it.

Think of it this way: Having your debts discharged means you'll have even more free cash flow. A prospective tenant that applies for housing, but owes a great deal of debt, will be more of a risk to a landlord than a tenant who has just discharged all of their debt.

What happens if a landlord declines my application?

If a potential landlord does choose to deny you housing because of bankruptcy, they are required to inform you through an adverse action notification. This notification will state the reason for the denial, the title and contact information of the bureau that provided them with your credit information, and the acknowledgment that you are allowed a free credit report due to the denial. Even still, don’t worry!

The Good News: Landlords Will Look At More Than Just Your Bankruptcy

A bankruptcy filing it isn't the be-all and end-all of housing approval. Landlords will take more into consideration other circumstances surrounding your financial situation such as current income and employment history.

Current monthly income. Another factor that potential landlords will consider is your current income. If your income is high enough, they will have less to worry about in terms of approving you for housing.

Employment History. Your employment history plays a big role in whether or not you are approved as well. How long you've been working for your current employer, how permanent the position is, what you were previously and are currently paid, and who you've worked for before will all play into a landlord's final decision.

Tips For Securing Housing After Bankruptcy

Tell your story. While the thought may be intimidating, one of the best things you can do to improve your chances of securing housing is to have a candid conversation with a potential landlord. Being open, honest, and upfront about your situation will help build a personal connection with them. An initial conversation gives you a chance to provide context to your filing as well as explain the steps you are taking to make the most of your fresh start.

Show your rental history. A good track record is something to be proud of. Try presenting records from previously paid rents. If you were making timely rental payments consistently, it will give potential landlords more confidence in you.

Show your recent credit history. Building up a solid credit history shortly after your bankruptcy filing is another great way to show landlords that you are working to improve your situation. Your most recent credit history is much more relevant than older bankruptcy filings, so use this to your advantage and take steps to increase your credit score.

Offer references. And lastly, have references available that can vouch for your creditworthiness. These references can be previous landlords, employers, and roommates. Anyone who's known you personally and can testify to your character makes for a good reference.

Bankruptcy and my government assistance

Can You Be Denied Welfare Assistance Because Of Bankruptcy?

Welfare benefits can be an awkward subject in a bankruptcy filing. Some are exempt, while others are not, and the lines between which are exempt and which are not are still being drawn in some cases.

If a welfare benefit is considered a statutory right, then you cannot lost it because of bankruptcy filing. This means that they won't be considered a source of income, and can't be held against you when a judge is determining your ability to pay back your debts. Let’s take a look at how this works out in real life.

Social Security and Disability (protected from bankruptcy). An example of statutory rights welfare is your Social Security benefits. These are a government-backed right that you earn by paying income tax. Therefore it is considered unlawful to have them withheld, even for bankruptcy. The same applies to disability benefits; neither of these can be denied because of bankruptcy.

Unemployment (usually protected, but not always). The situation becomes a little more complicated with unemployment benefits. This is a tricky subject, especially since so many who apply for bankruptcy do so as a result of being laid off.

For the vast majority, your unemployment benefits will not be considered income. But, if your unemployment benefits, combined with other sources of income like rental property or other household members, exceeds the median income in your state, then they will count as income and can be withheld at a judge's request. This is an extremely uncommon occurrence, but it could happen, and it's important to be aware of it.

If you are not on unemployment before filing for bankruptcy, you should be able to apply for benefits without decreasing your chances of being approved. So long as unemployment benefits don't push your income above the median, you should be able to apply for both without hurting your chances of qualifying for either.

Can You File For Bankruptcy While Unemployed

Just lost a job. If you are filing for bankruptcy due to a loss of work, there are a few factors that will need to be kept in mind. For one thing, whether or not you qualify for Chapter 7 bankruptcy depends on if you fall below the median income in your state. If you file for bankruptcy shortly after you lose your job, and you had a decent to high income at this job, then you might be disqualified from bankruptcy. However, if you wait a few months, after your loss of income will be reflected in your filing, then you have a higher chance of approval.

Just got a job. A similar situation could occur if you acquire a new job shortly before applying for bankruptcy. Either of these circumstances could be enough to push you above your state's median income, reducing your chances of qualifying for Chapter 7 bankruptcy.

Post-Bankruptcy Discrimination: Is It Allowed?

There are a lot of protections in place for those who file for bankruptcy. The law realizes that you are not always in control of the circumstances leading up to your bankruptcy. Lawmakers have done their best to keep you protected throughout the process while still being fair to future employers and creditors.

Public entities. No level of government is permitted to deny you something because of bankruptcy. This includes denying you a job, firing you, removing your public benefits, eviction from public residence, deny or refuse renewal of a state liquor license, prevent you from obtaining your college transcript, withhold a driver's license, and denying you a contract. None of these things will be lost because of bankruptcy.

Private entities. Private entities have a little more leniency when it comes to how they handle your filing. They can't fire you or use it as an excuse to not hire you unless it pertains to the job. However, it can be freely used by prospective landlords to deny you tenancy, so long as they inform you of why you were denied.


As you can see, the effect of bankruptcy on the various aspects of your life is as intense as you might think. The more time that passes after your bankruptcy filing, the less of an effect it will have on you and your credit report. Your discharged debts will be removed, positive credit will show up, and your bankruptcy will be little more than an outdated part of your history.

By the seven-year mark after filing for bankruptcy, all of your discharged debts are removed, and by ten years your bankruptcy is completely erased from public record. Don't let the fear of bankruptcy prevent you from bettering your financial outlook!

Written By:

Attorney Jonathan Petts


Jonathan Petts has over 10 years of experience in bankruptcy and is co-founder and Board Chair of Upsolve. Attorney Petts has an LLM in Bankruptcy from St. John's University, clerked for two federal bankruptcy judges, and worked at two top New York City law firms specializing in... read more about Attorney Jonathan Petts

It's easy to get help

Choose one of the options below to get assistance with your bankruptcy:

Free Web App

Take our screener to see if Upsolve is right for you.

Take Screener
9,329 families have filed with Upsolve! ☆

Private Attorney

Get a free bankruptcy evaluation from an independent law firm.

Find Attorney

Learning Center

Research and understand your options with our articles and guides.

Go to Learning Center →

Already an Upsolve user?

Read Support Articles →


    + Show Articles

    Upsolve is a 501(c)(3) nonprofit that started in 2016. Our mission is to help low-income families who cannot afford lawyers file bankruptcy for free, using an online web app. Spun out of Harvard Law School, our team includes lawyers, engineers, and judges. We have world-class funders that include the U.S. government, former Google CEO Eric Schmidt, and leading foundations. It's one of the greatest civil rights injustices of our time that low-income families can’t access their basic rights when they can’t afford to pay for help. Combining direct services and advocacy, we’re fighting this injustice.

    To learn more, read why we started Upsolve in 2016, our reviews from past users, and our press coverage from places like the New York Times and Wall Street Journal.