Changing Jobs During and After Filing Bankruptcy in Arizona
Completing your bankruptcy filing marks the beginning of a transitional period. So many people are uncertain about what they can and cannot do during that period. Changing a job is one example of a serious life change that could occur during or after the bankruptcy filing. How exactly is it going to affect the procedure and the eventual discharge, however?
Changing a Job While in the Process of Filing
No matter the bankruptcy chapter you’re filing under, your lawyer and your Arizona bankruptcy trustee have to be notified of a serious change that affects your financial situation.
Landing a new job is obviously one such change.
The first thing that your attorney will have to do is compare the amount you’ll be earning at a new job to the income you made before. In some instances, this change isn’t going to have a profound effect on your financial situation. As a result, it’s not going to affect the bankruptcy.
Whenever the change is significant enough, however, a few parameters of the bankruptcy filing may have to be modified.
Those who do a Chapter 7 filing are the ones that will be affected the mot. If you are doing a Chapter 7 filing, you will have to pass the Arizona means test and show your income is under the state’s median. A new job that increases your income significantly could make it impossible to pass the test.
In such instances, you may have to consider a switch from a Chapter 7 to a Chapter 13 bankruptcy.
People who are doing a Chapter 13 filing when they change a job could also experience a modification of their payment plan. Receiving a higher salary will increase the amount of disposable income, which means that the monthly instalments under the Chapter 13 payment plan will increase.
Effects of Bankruptcy on a Job Application
The effects of a new job on a bankruptcy are pretty easy to understand.
How about the effects of bankruptcy on a new job? Can you apply and will you be approved for a new position during or shortly after you’ve completed a bankruptcy filing?
As per US regulations, federal, state and local governmental agencies cannot consider your bankruptcy filing when deciding whether to hire you. The situation, however, is somewhat different when it comes to private employment in Arizona.
Some companies will conduct a credit check before hiring a new employee. The bankruptcy information is obviously included in the credit report. Usually, such information isn’t going to impact your ability to get a new job if you have the required skills.
In some sectors, however, a personal bankruptcy could be considered. This is mainly true for financial sector positions that have professionals dealing with money or investments. Accountants, payroll managers and financial consultants could be affected negatively when they have a bankruptcy filing on record.
In the US, an employer needs the candidate’s permission to run a credit check and examine their financial past. You can easily refuse but this refusal could also contribute to you being turned down for the job.
Honesty is the best policy. You could be open about your situation and the conditions that led to a bankruptcy filing during the job interview. Whenever you’re upfront and ready to speak of the issues you’ve faced in the past, chances are that potential employers will examine your application more favorably.
Any change during a bankruptcy filing could carry consequences. This is why you have to examine the pros, the cons and the long-term effects of the change before signing up for it. Talking to your Arizona bankruptcy attorney about a job change will also give you a clear idea about the full scope of implications.
Click here to find out the difference between Chapter 13 bankruptcy vs debt consolidation.