In times of great economic hardships, there are many unanswered questions that can increase an individual's anxiety over the future. The career implications that these financial issues raise can be some of the most concerning, especially as you'll need to hold a steady job with a competitive income in order to bring yourself and your family through. Bankruptcies and foreclosures should be last-resort processes, but professionals outside of finance and the armed forces can expect minimal career interference due to these proceedings.
Significance
Both foreclosure and declaring bankruptcy are significant negative financial factors that will be reported to the major credit bureaus, affecting your credit score. If employers conduct extensive background checks during the interview process, these financial issues may reflect negatively on your application. The inability to maintain a preplanned repayment schedule on a significant account signals to potential employers that your personal accountability and responsibility is lax.
Time Frame
The financial restrictions and negative credit report factors associated with either bankruptcy or foreclosure both end after a predetermined period of time, provided certain conditions have been met. Bankruptcies remain on an individual's credit report for up to six years after the bankruptcy order was issued, although some restrictions end after one year. Credit report items associated with foreclosure generally remain for a period of five to seven years.
Effects
Beyond a severe reduction in credit score, individuals who declare bankruptcy may find it extremely difficult to obtain a line of credit or borrow funds from a financial institution. There is also a significant psychological impact to bankruptcy, which might encourage a depressed state in an individual who has filed. A foreclosure may prohibit an individual from purchasing another home for a period of five to seven years, although a deed in lieu of foreclosure may reduce that time to four years.
Considerations
Some career paths are more affected by bankruptcies and foreclosures than others. Financial factors may be an issue during the security clearance process maintained by the U.S. armed forces, and can even prohibit a serviceman from promotion. Declaring bankruptcy can also prohibit an individual from political or business executive positions. For most other careers, although you will most likely have to disclose financial information, bankruptcy or foreclosure proceedings does not eliminate job prospects.
Warning
Although bankruptcy is not a major career concern, it does cause a number of personal hardships that can reduce your overall quality of life. Make sure you understand all major effects that bankruptcy or foreclosure will have on your financial status before entering legal proceedings.
Image Credits
- Bankrupt. Businessman with empty pockets (with clipping paths) . image by Vitaliy Pakhnyushchyy from Fotolia.com
