r/Accounting • u/WasToldTheredBeCake • 5h ago
Career Getting an accounting job after bankruptcy
Does anyone know if it’s significantly more challenging to get an accounting job (compared to other jobs) after declaring personal bankruptcy?
I’m looking at my options for handling debt and may end up having to declare bankruptcy. I’ve been dealing with medical issues that have kept me out of work for the past 3 years and I’ve racked up about $25k in credit card debt. I’m hoping that my health will soon be good enough to allow me to pursue a full time accounting job again, but I don’t know the timeline yet. Bankruptcy would be a last resort, and if that were the case, how much would it hurt my chances of getting my next accounting job and continuing to build my accounting career? Could it help to explain to a potential employer that it was due to medical issues? Would that even make a difference?
Additional context: Prior to this my credit was always good to great, 20 years credit history, no bankruptcies or other issues. I have a bachelor’s in accounting, 2-3 years combined accounting experience (AP role, plus 2 roles at small to medium companies doing combined admin and accounting, all private). Late 30s but could pass for 5 years younger.
Next role seeking probably something like Staff Accountant or Accounting Tech in private, non-profit, or government role. Hoping to continue advancing my career, but no super-ambitious goals like CFO.
Edit: typo.
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u/Sweet-Device-677 4h ago
having a bankruptcy may or may not impact any job you have, but that said, you should be okay. i filed chapter 7, when you could, and got another job about 2 months later. a month after that, i got a reasonable car loan because my car did get repo'd. itll be ok
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u/Fit_Tea2766 5h ago
It is tough. I am/ was an accountant, who filed bankruptcy (ch. 7).
Many people see it as “fraud”, simply because we “as accountants” should be aware of our debt capacity (DTI) and filing bankruptcy can be a detriment to that competency. While others see it as a smart move, and some know how much interest can accumulate and compound against you, and that filing bankruptcy is a smart move.
All depends. I can tell you that the creditors you have debt with, will hold it against you. Had one creditor (Chief Risk Officer, for a credit Union) send me a letter stating that I could only associate with the bank if I pay them back, and that was after a successful Ch. 7 discharge, and they are not supposed to do that.
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u/WasToldTheredBeCake 5h ago
How are they defining to “associate” with them? Something beyond holding an account or job there?
I appreciate you sharing. Was there anything you found helpful or wish you would’ve known sooner when it came to working in accounting after filing?
I am trying to work with them. Contacted a non-profit debt counseling service and they set up a tentative plan for me where they would negotiate lower interest rates with my creditors, close the accounts, and set up a plan for me to make monthly payments to them to pay off my debts (over almost 5 years). I was barely going to be able to afford the monthly payment amount they planned for me, but I agreed and thought I was all set. Then heard back that one of my creditors (with the highest balance and highest interest rate of 34%) would only agree to participate if I paid them an extra $225 per month on top of the planned amount. Of course, this was the first credit card I ever got, advertised as a “student friendly” card with no annual fee, no interest on the first $250 each month, reasonable interest rate… funny how those benefits all quietly went out the window despite my flawless payment history.
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u/Fit_Tea2766 4h ago edited 4h ago
Forget those debt forgiveness or “third party” debt negotiating companies.
I had two credit cards charged off by the issuing company (Amex and Visa), and the charge off was never reported to the credit bureaus. I contacted a debt negotiating company (to negotiate the debt, and consolidate it) and they were useless.
Also, when I filed my DTI was around 70%. When I filed, my credit score was in the 450 range. When the debt was discharged, my credit score jumped to around 600, due the credit utilization rate being lowered.
Keep in mind, when you insurance companies (car, life, home, etc) look at your credit history to determine the premium. Lower credit score could mean higher premiums, in the future.How did I end up in such “bad shape”? I started a job as a Senior Accountant in Private Equity, and took a $35k pay increase. My now ex-wife, found out and I did not tell her, so she filed for divorce, I was dragged out by her attorney and my only option was to put attorneys fees on credit cards, as I have a daughter and had to “fight” for her. Basically, I ended the divorce by settling; however, it was too late. The credit card balances were so high that the interest compounded against me, straight into bankruptcy.
My credit history is screwed, for the next 7-10 years. However, I did get another credit card within 1 month post bankruptcy. Mission Lane is a company that helps individuals who have filed bankruptcy, recover their credit by issuing lines of credit to high risk indivudals.
The credit Union that sent me the letter, after my debt with them was discharged, told me I could not open an account with them (at all) unless I paid them back.
Do not let your accounts go delinquent past 60 days. That is when the credit card companies report the delinquency to the credit bureaus. 30 days is when they send you a notice of lateness/ non-payment.
The second they go delinquent, and reported to the credit bureaus, is the second you have to worry about background/ credit checks for future employment.
Oddly enough, I worked in mortgages/ credit risk, prior to the Sr. Accountant role, so I knew the rules. But high interest rates, on a revolving line of credit (compounding interest) is something that will “drag you further down” and do so quickly.My advice, if you cannot pay off the total outstanding balance - immediately, file for Chapter 7. Don’t spend time trying to negotiate monthly payments.
And know, the only debts that cannot be discharged are student loans, domestic support obligations, taxes, and restitution. Everything else can be “wiped out”.
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u/FeelingDiver4616 CPA (Can), CA, CBV 5h ago
Having a bankruptcy on your credit report could be a red flag for future employers who conduct pre-employment credit checks, particularly for positions involving financial responsibilities. It could also potentially complicate fidelity bonding, which might limit the roles and responsibilities an employer is willing to assign to you.
Before going down the bankruptcy route, I'd strongly recommend exploring alternatives such as a debt management plan through a nonprofit credit counselling agency or negotiating repayment arrangements directly with your creditors. Depending on your circumstances, these options could provide some financial relief without the potentially serious credit and career consequences of filing for bankruptcy.
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u/WasToldTheredBeCake 4h ago
I appreciate the info, that’s helpful to know. I have been working with a nonprofit credit counselor and had a tentative plan set up with them that I was barely going to be able to afford but was going to go ahead with. Then one of my creditors (with my highest balance and a 34% interest rate) came back and would only agree to the plan if I paid them significantly more each month than the counseling agency proposed (and more than my current minimum payment). I’m going to call them myself to see if we can set something else up. Otherwise I may be out of alternatives.
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u/Bearindamachine Management 3h ago
That is certainly not ideal in our profession.
To a hiring manager, a bankruptcy or just a terrible credit score in a candidates background could be an indication that they might have problems with risk taking activities (gambling/drugs/porn/etc) that could have resulted in a bankruptcy. Obviously, you don’t want someone with those kinds of issues involved in internal controls around access to cash.
While it is common practice to run a credit check on all financing/accounting people before they start their positions, not all do. They normally run your credit after they’ve decided to move forward with an offer. I would be upfront before they run that there is a bankruptcy due to medical debt on your credit history.
That being said, have you looked into getting them to cancel a large percentage of the debt for a much smaller payment? Medical debt is usually very negotiable.
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u/WasToldTheredBeCake 2h ago
Thank you, that’s helpful.
It’s technically credit card debt accrued due to medical issues, not medical debt, so I’m not sure how easy it would be to get it negotiated down. But I’ll still look into it. Thank you.
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u/Bearindamachine Management 2h ago
Unfortunately, by understanding, because you paid those with credit cards it is no longer medical debt but credit card debt.
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u/CommonPrestigious905 5h ago
Bankruptcy in accounting is obviously not ideal but it’s not the career-ender people make it out to be, especially with medical debt and a clean history before that.