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How to Disclose a Bankruptcy to a Future Employer

by Ellie Williams

If you have been forced to declare bankruptcy, you likely want to put it behind you as quickly as possible. If you are searching for a job, however, you might need to explain your financial past to prospective employers. When you do, briefly explain the circumstances and then shift your focus to your qualifications and your career goals.

Establish Rapport First

You don’t need to inform prospective employers of your bankruptcy right away. They are more likely to look past it if they have already gotten to know you and determined you are a strong candidate. If you know the employer plans to conduct multiple rounds of interviews, wait until at least your second meeting. If you are unsure of the employer’s plans, ask at the end of the interview what the next step is. Only bring up your bankruptcy if the interviewer plans to make a decision after this round or if he plans to run a credit check.

Be Honest

While you should wait until you know the employer is seriously considering you, you also don’t want him to find out when he runs a background check. He might feel you tried to hide your past credit problems or did not think he deserved to know. Telling employers in person, before they find out on their own, can sometimes mitigate the damage of a past bankruptcy. By disclosing it early, you demonstrate a commitment to openness and honesty; qualities employers value in a potential employee.

Take Responsibility

When explaining your bankruptcy, own up to it and briefly touch on the circumstances leading up to your financial difficulties. You do not need to go into extensive detail; after all you are entitled to your privacy; however, an employer might be more sympathetic to your situation when he learns you ended up there through an illness in the family, a layoff or other unforeseen and unavoidable event. If you simply overspent, emphasize that the experience taught you a valuable lesson that has prompted you to re-examine and change your financial habits.

Don’t Dwell On It

Do not spend more time than necessary discussing your bankruptcy, and do not let it eclipse your skills, work experience and other qualifications. Limit your explanation to a sentence or two, and quickly steer the conversation toward your plans for the job and for your future, and for how you are a good fit for the position. For example, say “Now that I have put my money problems behind me I’m eager to make a fresh start, which is why I’m so excited about the prospect of working here.” Or, say “Despite my financial difficulties, I consistently went above and beyond at my last job, as my supervisor there will confirm.”

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