In the Readers’ Forum section of this week’s Ask The Headhunter Newsletter there’s a question from a reader that fits into a category I don’t use on this blog: “There but for the grace of God go I…” Maybe I oughta add it.

I went through a personal and business bankruptcy. I’m gradually getting back up on my feet. I’ve never had financial problems before, but the economic times hit me hard. Now I need to jumpstart the rest of my life. How should I handle this when a potential employer asks me about it?

If several things were to get very weird all at once, it could be any one of us asking this question. You go belly-up financially, but you finally get an interview, and the employer wants to know more. What do you say? How do you handle it?

Managers — Under what circumstances would you still hire someone who went bankrupt?


  1. It honestly depends on the details. They say medical bills are the number one reason for this, how can you really fault a person for that. And in these times, I know personally people who didn’t have a single sale for 4 months! It is hard out there and I’m not going to fault anyone who took a hit in these times. Many small businesses I see as the victims in all this. I’m not sorry for the hedge fund guys but the guys on main street, I know that pain they are feeling and much of it was not of their own creation so I will not fault them that.

    Now for the depends part, I would ask about what led to that situation, if I heard they were a drug addict or gambled aways their life savings at the casino, yeah I will have some issues with that.

    But if they got hit in this market and it was circumstances, I would look at them seriously. They may be hungry to prove they are not a failure and work harder. And frankly, I would take that drive to prove themselves as an asset. Too many people who don’t have that anymore in the corporate world, would be nice to get teamplayers who have felt real defeat and got up and drove onwards.

  2. I went through a bankruptcy in 2003, and this issue came up a lot, as I have had 4 different employers since then. Every time I got to the stage where they wanted to make an offer contingent on a background check, I made sure that the employer knew what they were going to find. I looked at it from the perspective of…does the employer want any surprises? Of course not, and that is how I handled it. I did not go into explicit detail about the circumstances, but at least admitted that it happened, and that I have made positive progress toward the future. This is no different than any other interview question.

    As I have helped people find work, I find that many people want to hide these embarrassing facts of their financial health. The hiding of these facts, non-disclosure, has bitten more people in the behind than I can count. I always recommend that people put the employer shoe on the their own foot. Would they like it if they were going to make a major decision, and thought they had all the facts only to learn that there is something minor that could, though often does not, influence their decision?

  3. I agree with Steve; up front full disclosure is key. In my company, I have observed people who were denied a position for lying about their criminal background. Not denied because of their history, but for LYING about their history.

    Also, the bankruptcy will cause difficulty in positions dealing with money or requiring security clearance.

  4. Most smart companies that don’t require cash handling or security clearances as part of their job descriptions have removed credit checks from their pre employment hiring criteria. As a percentage of population, bankruptcies hit minorities hardest and employers can’t defend against disparate impact claims if they can’t show an objective need to tie credit history to employability. Steve is right on — don’t lie about it, but be careful about who you disclose it to and whether or not it really matters for the job you’re seeking.

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