I Just Filed Bankruptcy. Can My Employer Fire Me?
Employers can dismiss employees for many reasons. A bankruptcy filing cannot be one of them. If you’re worried about taking the next steps to filing bankruptcy because you are worried you might lose your job if your employer finds out, don’t fret. You cannot be let go because you file bankruptcy. It is considered discrimination, not different than racial or religious discrimination, and it’s against the law for any employer, private or governmental, to fire you only because you file for bankruptcy. Also, an employer cannot take any other negative action against you, such as demoting you, or reducing your pay, just because you file for bankruptcy. Such actions are discriminatory and you have legal remedies available to you if you find yourself in that position. Conversely, if you’re fired due to general incompetence, corruption, or you like to take long 3 martini lunches, filing bankruptcy will not spare you. It cannot be used as a shield against legitimate disciplinary action including termination.
Employers typically will not find out about your bankruptcy filing unless your wages have been garnished or you enter into a Chapter 13 repayment plan that is paid directly out of your paycheck. If you file bankruptcy, the wage garnishment will stop, so your employer, or at least the payroll department, will know of the filing. They’ll find out, but that is not a reason not to take the first step to restoring your financial viability.
If you’re looking for a job and you’re thinking about filing bankruptcy, the affect of the filing depends on if you are looking for a government job, or a job in private industry. No federal, state or local government agency can take your bankruptcy into account when making a hiring decision about you. However, that same protection does not exist in the private corporate world because private employers will often require a credit check prior to offering to you a new job. If you refuse to consent to the credit check, employers do not have to offer you a position. It’s certainly not the end all of any potential job, so if you’ve filed for bankruptcy, it’s best to be honest with the people you speak to in the interview process about how your financial problems are behind you now, and you’re excited to move forward with a new opportunity.
Don’t be scared to take the steps required to restore your financial health. If you’ve got a good job that you like, and you’ve developed strong relationships, and you’ve run into some hard times, most likely your employer will embrace helping you out. Not look to throw you out on the street. Filing bankruptcy shouldn’t mean giving up your career, and you have the law behind you to ensure your protection. Consult an attorney if you think you’re a victim of bankruptcy discrimination and protect that job of your dreams.